A Scary Statement from Powell

Jerome Powell just said…

That more small banks will likely close due to commercial real estate weaknesses – adding that he doesn’t think “there’s much risk of a repeat of 2008.”

This is a scary statement considering it comes from the same guy who said that inflation was transitory.

In a new 60-Minutes interview…

Fed chair Jerome Powell talked about the new concerns in the banking sector.

It all started last week when New York Community Bancorp (NYSE: NYCB) slashed its dividend, reported a shocking quarterly loss, and stockpiled millions for future loan losses related to commercial real estate holdings.

The stock fell 38% on Wednesday and 11% the next day…

… dragging the rest of the sector down with it.

Now Powell is predicting that it’s likely we’ll have more banks closing or merging.

He also says the problem is ultimately “manageable” – and that “I don’t think there’s much risk of a repeat of 2008.”

But could this statement be like Bernake’s “the subprime market is contained”?

Frankly, I don’t know…

But while history doesn’t repeat itself, it often rhymes.

Yours in Wealth,

Ian Wyatt