The Julia La Roche Show #317 Chris Whalen: Divided Fed, Home Prices Falling, Bank Earnings Up In 2026 & Private Equity Crisis Ahead?
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Dec 13, 2025 
Chris Whalen, chairman of Whalen Global Advisors and a leading voice in credit and banking analysis, dives into pressing financial topics. He unpacks the divided Fed's recent decisions and forecasts a home price correction on the horizon. Whalen raises alarms about 15-20% of private equity firms teetering on insolvency. He also highlights risks in commercial real estate, scrutinizes JPMorgan's expense guidance, and challenges the utility of stablecoins. Plus, he shares insights on bank earnings and the hidden dangers in non-depository lending.
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Divided Fed Aims For Modest Rate Goal
- The Fed lacks consensus and likely paused after a quarter-point cut to target ~3% short-term rates.
- Chris Whalen expects mortgage rates to settle in the mid-to-high 5% range, calming housing markets.
Residential vs. Commercial Real Estate Diverge
- Home markets are local: New York holds up due to scarce construction while Sunbelt has excess supply.
- Commercial real estate is the larger concern, with big office assets collapsing in value.
Reserve Purchases Are Liquidity Management
- The Fed's reserve management purchases buy treasuries only and avoid adding MBS to the balance sheet.
- Whalen sees this as liquidity management, not a return to mortgage-backed QE.
