Posted by: Andrew Pia
Written by: Steve Matthews
Nov. 10 (Bloomberg) -- Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy will probably recover slowly from the deepest recession since the 1930s because of rising bank losses, especially in commercial real estate.
“Now that growth has resumed, the overall objective of economic policy should be to bring about a durable recovery and an environment that reduces unemployment as quickly as possible while containing inflationary pressures,” Lockhart said today in a speech in Atlanta. “The process of achieving this objective will necessarily involve judicious removal of government supports and the normalization of monetary policy.”
Policy makers have expressed concern that rising commercial real estate loan defaults could pose a risk to U.S. banks and hinder a recovery. All 12 Fed district banks reported a weak or declining commercial real estate market, the central bank said Oct. 21 in its Beige Book business survey.