An economic ticking time bomb could go off in the middle of the 2024 election

Daily Caller News Foundation

About $1.5 trillion in commercial real estate mortgages will come due over the next two years, spelling a major risk to the $20 trillion commercial real estate market ahead of the next presidential election, according to Politico.

The Federal Reserve raised interest rates by a quarter point in May, and high interest rates tend to drive down property values, increasing financial pressure on owners, according to Politico. Since commercial mortgages held by banks are with small or regional lenders, widespread write-downs on these loans could create problems throughout the economy.

“Am I worried? The short answer is yes,” Republican Louisiana Sen. John Kennedy, a senior member of the Senate Banking Committee, told Politico. “The long answer is hell yes. I hope the Federal Reserve and the banking regulators are worried as well, and I hope they won’t be caught flat-footed like they were with the bank failures that we’ve had so far.”

On top of rising interest rates, commercial buildings have also faced a fall in value due to remote work-related office vacancies, according to the Federal Reserve’s May report.

“Right now, we have the double whammy of much higher interest rates and the commercial real estate market going through a shock post-covid,” Democratic Virginia Sen. Mark Warner told Politico. “So I don’t think we can presume that… we’re going to be able to simply glide through [without a crash]. I’m still trying to sort through some of the policy options. … I have encouraged the White House, though, that we need to do some more intervention on these regional banks right away.”

Commercial real estate holders could experience credit loss due to “the magnitude of a correction in property values,” which “could lead to credit losses by holders of CRE debt,” according to the Federal Reserve.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].


Please help us! If you are fed up with letting radical big tech execs, phony fact-checkers, tyrannical liberals and a lying mainstream media have unprecedented power over your news please consider making a donation to BPR to help us fight them. Now is the time. Truth has never been more critical!

Success! Thank you for donating. Please share BPR content to help combat the lies.


We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.

PLEASE JOIN OUR NEW COMMENT SYSTEM! We love hearing from our readers and invite you to join us for feedback and great conversation. If you've commented with us before, we'll need you to re-input your email address for this. The public will not see it and we do not share it.

Latest Articles