Atlanta Fed President Dennis Lockhart said earlier today that rising defaults on commercial real estate was the main domestic risk that “keeps me up at night.” The official warned that “Commercial real estate is one that concerns me. It seemed to have lagged the residential real estate problems” The official fears that 2009 could be the year commercial real estate collapses.
Meanwhile Lockhart feels the risk of hyper inflation is “very low.” But he warns that the Fed will need to shrink balance sheet, potentially raise rates as economy recovers.
