MNI BRIEF: Pre-Covid Debt Build To Slow Rebound- Rosengren

Boston Fed President Eric Rosengren said Thursday the slow build of debt in the pre-Covid low-interest-rate environment likely will make the economic recovery from the pandemic more difficult, also emphasizing the need to take more action against financial stability risks.

"The increased risk build-up, such as the reaching-for-yield behavior in commercial real estate or increased corporate leverage, make economic downturns including this one more severe," the Boston chief said in prepared remarks for a speech at Marquette University, adding that banking data do not yet reflect significant problems in commercial real estate. "If we expect to remain in a low-interest-rate environment for a protracted period of time, we need to take more precautions against financial stability risks for when the next economic shock hits," he said without adding specifics.