Three months ahead of the end of Jerome Powell’s term, his successor as Federal Reserve chair has been picked. The real estate industry has thoughts.
Late last week, Donald Trump announced the nomination of Kevin Warsh to serve as the next chair of the central bank. Warsh is poised to take over when Powell’s term ends on May 15, though Senate approval is no sure thing as legislators express opposition to Trump’s attacks on the Fed.
Many in commercial real estate are hoping Warsh’s arrival ushers in a period of more stability and independence from Trump’s assault on the Fed.
“We think Kevin Warsh will be an excellent Fed governor and, frankly, for the real estate industry, he will be helpful,” Toby Cobb of lender 3650 Capital told the Commercial Observer.
Avison Young chair Mark Rose celebrated the potential of “much-needed certainty,” while his reputation as “an inflation hawk” should prove helpful in bringing down interest rates, according to Sam Chandan, director of the Chao-Hon Chen Institute for Global Real Estate Finance at New York University.
Warsh has Wall Street and central bank experience, having been on the board of governors of the Fed from 2006 to 2011. Prior to that, he was an investment banker at Morgan Stanley from 1995 to 2002 and has recently been a fellow at Stanford University‘s Hoover Institution.
Industry groups are preparing to work with Warsh as they navigate choppy economic waters.
“We look forward to engaging with Mr. Warsh and policymakers throughout the confirmation process and beyond to advance policies that promote a healthy, resilient commercial real estate finance system,” CRE Finance Council president Lisa Pendergast said in a statement.
MBA president Bob Broeksmith used Warsh’s appointment as an opportunity to reiterate the association’s continued “pressing for targeted regulatory improvements.”
Others don’t think the pick will move the industry’s needle one way or another, at least not until Warsh is in place.
“The housing market should expect mortgage rates to hold steady; this nomination won’t push rates up or down,” Redfin head of economics research Chen Zhao wrote.
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