Fed may have tightened too much: SunTrust’s Miller | Reuters Recommends | Reuters.com
The Federal Reserve may already have raised interest rates too far and must cut them early next year to keep the 
economy from falling into recession, says the top economist at the seventh largest bank in the United States.
Gregory Miller, of SunTrust Banks Inc. (STI.N: Quote, Profile , Research), has seen the fruits of the Fed’s handiwork manifest in a rapidly souring housing market across the southeast.
“There’s a risk that the Fed may have already overshot, that if they simply do nothing for an extended period time, that the price of credit, coupled with the deterioration in housing, could be sufficient to push us into recession,” Miller said in an interview.
That said, Miller remains confident that the Fed would recognize the risk soon enough to avoid recession. “I’m thinking a soft landing is still the smart money call.”
Atlanta-based SunTrust’s markets, which extends from the mid-Atlantic through Florida, are “struggling,” Miller said. “We’re clearly reflecting the overall slowdown in the economy and the easiest place to see it is in housing,” he said. “High-end condos are struggling greatly with a housing correction and there’s a good deal of risk that seeps into other sectors of the economy.”
Housing starts in the southern United States plunged 26.4 percent in October, the Commerce Department recently reported.