1516
multifamily properties.”
“Because commercial real estate is widely held in the portfolios of leveraged institutions, commercial real estate cycles can amplify the impact of economic downturns as financial institutions need to write down the value of loans and cut back on lending to maintain their capital ratios,” he said.
This means that the risks to the economy are becoming balanced, or “two-sided,” he said.
With risks to the upside from asset purchases, there are also “downside” risks from global weakness, he said.
Fed officials have refrained all year from describing the risks to the outlook as balanced in their policy statements.
The last time that the statement said risks were balanced was last December when the central bank hiked interest rates by a quarter percentage point.
Rosengren said the economy has been “relatively resistant to shocks from abroad of late.” And he said that concern with fragile global economies “does not seem to be strongly prices into financial assets, at least to date.”
By Greg Robb,
Senior economics reporter
Sept 9, 2016
posted on marketwatch.com