Rates Will Come Down

Starwood Capital Group CEO Barry Sternlicht discusses his beliefs about the current state of the US economy and the Federal Reserve’s handling of the global shutdown caused by the pandemic. He notes that most asset classes, except for US office space, have seen “stable fundamentals.” He attributes the slowed performance of office spaces to a balance sheet crisis on the part of the government, which he believes is not understanding the true makeup of the US labor force. He also discusses the impact of the Federal Reserve’s rapid increase in interest rates on immigrants and their ability to work in the US. He believes that interest rates will come down and that the Fed will have to relent on lowering rates globally. Sternberg also discusses his views on the US short-term interest rate, which he predicts will soon be four, and his belief that all major central banks worldwide must follow US policy regarding interest rates.