Motley Fool Money The Great Lag
Oct 15, 2023
Ben Miller, co-founder and CEO of Fundrise, brings his expertise in real estate investment to the conversation. He delves into how the Federal Reserve's slow actions impact the economy, highlighting the risks and opportunities arising from current market dynamics. Miller discusses the implications of rising interest rates on commercial real estate and how AI is reshaping investment strategies. He also shares insights on navigating the complexities of private vs. public investment in an innovative tech landscape, signaling a hopeful outlook for recovery.
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The Great Deleveraging
- The Great Deleveraging is driven by rising interest rates on accumulated debt.
- Entities must pay down or sell assets, impacting the economy.
Lenders as Borrowers
- Lenders, particularly banks, are the biggest borrowers, creating systemic fragility through leveraged credit.
- This fragility poses a significant risk to the financial system.
The Great Lag
- The impact of monetary policy changes has a significant lag, creating a "Great Lag."
- This lag makes it challenging to predict and manage economic consequences.