The Federal Reserve is paying close attention to the commercial real estate (CRE) loan situation, Chair Jerome Powell told a Congressional committee Wednesday. During his testimony before the House Committee on Financial Services, Powell also noted that nearly all members of the Federal Open Market Committee expect it will be “appropriate” to raise interest rates by year’s end following this month’s pause on further rate increases.
In response to Rep. Young Kim’s (R-CA) question about providing more time for smaller banks with CRE loans totaling $1.5 trillion to refinance, Powell stated Fed supervisors are “very engaged with those banks and particularly those that have higher concentrations.” He added there is a strategy in place for resolving issues related specifically to office sector loans affected by work-from-home trends during COVID-19 pandemic times.
A photo of Powell testifying before Congress in 2020 was included alongside his comments regarding CRE loan situation and potential interest rate hikes later this year.
