Real estate is a highly levered asset class, which means that pricing is sensitive to interest rate changes.

Larry Summers recently published a post on his blog where he argued that the Fed (US) is being far too complacent about their ability to respond effectively to a future recession. He sees this as their biggest monetary policy challenge going forward.

Given the potential impact to real estate and city building as a whole, I thought I would summarize some of his key points:

• Private sector GDP growth in the US averaged 1.3% over the last year
  

• Since the 1960s, this level of tepid growth has typically foreshadowed a recession
  

• Larry sees > 50% chance that the US economy will enter a recession in the next 3 years
  

• 400-500 basis points of monetary easing is usually needed to counter recessionary pressures
  

• The Feds will likely not have this much room to play with when the next recession comes along
  

I don’t think anyone could have predicted that rates would remain

Real estate is a highly levered asset class, which means that pricing is sensitive to interest rate changes.

Larry Summers recently published a post on his blog where he argued that the Fed (US) is being far too complacent about their ability to respond effectively to a future recession. He sees this as their biggest monetary policy challenge going forward.

Given the potential impact to real estate and city building as a whole, I thought I would summarize some of his key points:

• Private sector GDP growth in the US averaged 1.3% over the last year
  

• Since the 1960s, this level of tepid growth has typically foreshadowed a recession
  

• Larry sees > 50% chance that the US economy will enter a recession in the next 3 years
  

• 400-500 basis points of monetary easing is usually needed to counter recessionary pressures
  

• The Feds will likely not have this much room to play with when the next recession comes along
  

I don’t think anyone could have predicted that rates would remain