Fed sees next potential asset-price bubble in apartment towers

Atlanta, Georgia

A DECADE after the US housing market collapsed, Federal Reserve officials are watching rising apartment towers as the next potential asset-price bubble, which could add to the debate about the pace of interest-rate hikes this year.

Fed chief Janet Yellen cited commercial real estate prices as "high" in a speech at Stanford University on Jan 19. That message has been echoed by governor Jerome Powell, who warned that "low rates may lead to a reach for yield", as well as Boston Fed president Eric Rosengren, who cited luxury housing in his city.