Saturday, April 02, 2005

Federal Reserve: Its A Bubble

The Federal Reserve discussed the housing bubble in its last meeting, according to the Dallas Morning News. "In the minutes from its February meeting, the Fed acknowledged the risks to the economy associated with the current speculative fervor in housing."

"The Fed is caught in this dilemma similar to 1999 when they were afraid to raise rates because of the equity bubble. They don't want to burst the housing bubble, but they certainly don't want to keep building it up either."

4 Comments:

At 9:05 AM, Anonymous dry fly said...

Nice to see they noticed. I wonder what happened that finally caused them to wake up and smell the coffee...

...Now the bigger question is what will the Fed do about it and should we really start worrying?

 
At 10:50 AM, Blogger Ben Jones said...

dry fly,
this post covers your question..ben

http://thehousingbubble.blogspot.com/2005/03/greenspan-fed-menace-to-society.html

 
At 4:25 PM, Anonymous Frank said...

I don't see anything coming even close to referring to a "speculative fervor" in the minutes; they do refer to housing as "bouyant" and note any declines could pose a risk to the economy.

http://www.federalreserve.gov/FOMC/minutes/20050202.htm

 
At 7:34 PM, Blogger Ben Jones said...

Thanks Frank,
I will try to read the minutes tomorrow...Ben

 

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