Fed's Rosengren: We Could Be Facing a Commercial Real Estate Bubble
The current low rates have unprepared investors taking too much risk in a search for higher returns, he says. "The trend in commercial real estate prices should be thoughtfully monitored," he says, questioning all the construction's sustainability.
Commercial real estate prices have grown rapidly in recent years, despite only modest growth in GDP, Rosengren says. Other Fed officials are also worried about financial instability, with S.F. Fed President John Williams also noticing signs of price imbalances. [MW]