National Association of REALTORS® Chief Economist Lawrence Yun condemned the Federal Reserve’s most-recent vote to raise its benchmark interest rate, calling the move “unnecessary and harmful.”

The inflationary pressures the Fed has been fighting — it’s raised rates 10 times over the last year — are finally starting to ease, with consumer-price inflation having fallen to 5% in the most-recent reading from 9% last summer, Yun noted.

“It will be even lower as the heavyweight component to inflation, which is housing rent, will inevitably slow down given the 40-year high robust construction of new empty apartment units,” Yun said in a press release, adding that additional monetary-policy tightening is already occurring.

“The fast rate hikes by the Fed have upended the balance sheets of many small regional banks,” Yun said. “They are becoming zombie-like banks, unable to lend even to good businesses as they are more concerned with balance-sheet shuffling for survival. This situation will worsen with each additional rate hike by the Federal Reserve.”

Only an end to the rate increases or perhaps even a rate cut later this year will give small banks the room they need to survive against their larger competitors, Yun said.