Another bombshell remark dropped from a Federal Reserve official on Thursday. As Wall Street Journal chief economics correspondent Nick Timiraos reported on Twitter, St. Louis Federal Reserve Bank president Jim Bullard gave a presentation on Thursday outlining what he saw as a "sufficiently restrictive level" of the benchmark federal funds rate needed to control inflation.
On the "generous" assumptions side, he thought it needed to be at least 5%. "With less generous" assumptions—higher than 7%.
Remember, the fed funds rate range is currently 3.75% to 4.00%. This could be a significant jump, going well into 2023, leaving months for the full impact to be felt, and, for CRE, an ongoing disaster when it comes to projects being viable, either from the start or at refinancing.
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