North Pier’s Managing Partner Jim Scheinberg was recently live on Reuters’ Trading at Noon with host Elena Casas. Jim and Elena discussed the commercial real estate market, the potential for more SVB-like failures, and what the soon to be released CPI report could mean for the economy.
Jim also provided insight on recent Fed policies and inflation concerns. “The Fed seems to be focused almost solely on wage inflation. And wage inflation, historically at equilibrium point or near equilibrium point in the labor markets, would be susceptible to rising interest rates and a raising the cost of capital for businesses that are hiring. But that’s not the scenario that we’re in right now,” says Jim.
“Right now, we have an imbalance with far too few workers and far more many open jobs, especially in the U.S.,” he continues. “Raising interest rates by a quarter or half percent is not necessarily going to kill the demand for jobs. Ultimately, by raising rates, [the Fed] is actually impacting the cost of capital in other areas that we need to get some relief in. They may be creating inflation in areas that they’re trying to reduce.”
Watch Jim’s full interview by clicking here.