Powell: Some Small Banks May Fail As Downtown Commercial Real Estate Declines
• Powell expects some small and medium-sized banks to fail due to commercial real estate losses • Decline in office space and retail assets putting these banks at risk • Fed is in dialogue with at-risk banks about having enough capital and liquidity • Drop in demand for downtown commercial real estate is a "secular change" per Powell • Fed confident it can contain fallout and prevent broader crisis, though some bank failures likely