Odd Lots The Real Pain From Rate Hikes May Still Be on the Way
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Sep 28, 2023 Julia Coronado, Founder and CEO of Macro Policy Perspectives and Clinical Associate Professor at the University of Texas, discusses the lagging effects of recent Federal Reserve rate hikes on the economy. She highlights that the pain from these hikes is yet to be fully felt, especially in commercial real estate and refinancing challenges. The conversation dives into the mixed signals from inflation, robust growth, and low unemployment, questioning whether the real consequences of increased rates are just around the corner.
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Austin Real Estate Vacancies
- Austin's real estate market shows high vacancy rates despite a construction boom.
- Many buildings, including those by tech companies like Google and Meta, remain unoccupied.
CRE Distress and Economic Impact
- Commercial real estate distress impacts the wider economy through job losses and reduced economic activity.
- The banking sector could face increased defaults and delinquencies, potentially leading to bank failures.
Monetary Policy Lags and Impact
- Monetary policy's impact on speculative activity is debated.
- Lags in monetary policy are likely longer due to termed-out debt, suggesting future restraining effects.