Skip to main content

Greenspan Warns of Economic Danger With Rate Hikes

Phil Hall
Aug 07, 2017
The Federal Housing Finance Agency (FHFA) conducted its annual stress test of Fannie Mae and Freddie Mac, and the results were not exactly encouraging

The former Federal Reserve chairman who warned the world about “irrational exuberance” is now offering a doom-and-gloom forecast on the U.S. economy’s well-being once interest rates shoot up.
In a CNBC interview, Alan Greenspan envisioned a perfect storm in the making as his central bank successors start to raise rates. "The current level of interest rates is abnormally low and there's only one direction in which they can go, and when they start they will be rather rapid," Greenspan said on the program "Squawk Box," adding rate acceleration will create more problems than solutions—although he was vague on when that would occur. "I have no time frame on the forecast. I have a chart which goes back to the 1800s and I can tell you that this particular period sticks out. But you have no way of knowing in advance when it will actually trigger … It looks stronger just before it isn't stronger."
Greenspan added that anyone who believed they could forecast the collapse of a potential new bubble is "in for a disastrous" experience. And as for his now-famous “irrational exuberance” remark, he admitted he was not looking for aphorism immortality when he said in a 1996 speech.
“I was doing it as part of a much broader speech and talking about the analysis of the markets and the like, and I wasn't trying to focus short term,” he recalled. “But the press loved that term.”

Aug 07, 2017
loanDepot And mellohome Introduce Home Services Bundle

loanDepot, Inc. and its sister company mellohome are launching a proprietary bundle of home buying and selling services.

Industry News
Jul 30, 2021
Gateway Mortgage Surpasses 165 Mortgage Centers With 10 New Additions

Gateway Mortgage reported significant growth in the company, prompting it to open 10 new locations across Colorado, Idaho, Oklahoma, Texas, Oregon, and Wyoming.

Industry News
Jul 30, 2021
FHFA Requires 30-Day Notice Prior To Eviction

Wednesday, the Federal Housing Finance Agency (FHFA) announced that tenants of multi-family properties must be given 30 days notice to vacate before the tenant is required to leave the premise.

Industry News
Jul 29, 2021
Houston-Based Stewart Acquires Title First Agency

Ohio-Based Agency Has 20 Offices And Operates in 32 States

Industry News
Jul 28, 2021
Planet Home Lending Reports Total Origination Volume Of $6.8B In Q2 2021

Planet Home Lending's total origination volume reached $6.8 billion in Q2 2021, up 77% from $3.9 billion in Q2 2020.

Industry News
Jul 22, 2021
FHFA Ends Controversial Refinance Fee

The FHFA announced that Fannie Mae and Freddie Mac will eliminate the Adverse Market Refinance Fee for loan deliveries, starting August 1, 2021.

Analysis and Data
Jul 19, 2021