Federal Reserve Bank of Kansas City President: Rising Rates Could Cause 33% Fall in Farm Values

From Bloomberg:

Federal Reserve Bank of Kansas City President Thomas Hoenig said that an increase in interest rates could trigger a 33 percent decline in the price of agricultural land.

“If interest rates rise we could lose a third of the value of that land in a very short time,” Hoenig said today in a speech in West Lafayette, Indiana.

Land prices are possibly being driven by “inflationary impulses,” and “it’s also driven by interest rates,” he said in a lecture for the Purdue University Department of Agricultural Economics. He reiterated his view that the Fed should raise the benchmark interest rate to 1 percent and then pause.

I should maybe go visit the KC Fed.