Schmid: Long-term rates creating friction in housing, commercial — SkimNews
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- Jeff Schmid, president of the Kansas City Fed, told Axios on Thursday that the relentless rise in long-term interest rates is starting to have effects on more parts of the economy.
- Schmid said he is "starting to see some friction in some of the long-market users of credit," signaling stress in long-dated borrowing rather than short-term Fed policy rates.
- Schmid specifically pointed to multifamily housing and commercial markets as sectors showing emerging strain from higher long-term rates.
Why it matters: A sitting regional Fed president publicly identifying specific commercial sectors (multifamily housing, commercial credit) as showing strain from long-end rates matters because the Fed does not set long-term rates directly — their rise reflects market forces the Fed cannot easily offset, raising the stakes for the housing and commercial credit sectors Schmid named.
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