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Report Says Recession Risk Is Higher for 2001

SAN FRANCISCO-Despite a surprise cut in interest rates this week, economist Kenneth Rosen warns the chance of a US recession remain high. The commercial real estate market likely will bounce back unscarred, however, concludes Rosen.

By Becky Bergman | Updated on January 07, 2001

SAN FRANCISCO-Despite the Federal Reserve’s surprise interest-rate cut on Wednesday, the nation’s economy remains fragile and could still face a potential recession, according to a report published by the Rosen Consulting Group in San Francisco. The chances of a US recession this year has climbed to nearly 50%, according to Kenneth Rosen, a professor at the Haas School of Business at the University of California at Berkeley. That number could go as high as 70%, says Rosen, who is also the chairman of Lend Lease Rosen Securities LLC.

But while the news of a possible recession and a depressed stock market looms over the nation, the commercial real estate market, which has demonstrated continuing demand, is poised for a soft landing in the event of a recession and will likely continue to sizzle, unlike its crash a decade ago. Rosen attributes that in part to the real estate market’s volatility and the Fed’s cuts this week.

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