Correspondent Blog

We established that stagflation (defined as high inflation and likely accompanied by higher interest rates and stagnant or no growth) could be toxic for real estate projects.  Few bankers working today have any experience with how destructive stagflation can be since this environment last occurred in the 1970s.

We recently posted an article (HERE) about how the Federal Reserve is bursting the everything bubble, and this will cause pain for some banks in the form of interest rate, credit, and liquidity risk.  One of the likely outcomes of this tightening cycle is stagflation, which will cause cash flow constraints for borrowers and create…