BOSTON FED PRES. WANTS TO AVOIS BOOM & BUST SITUATION
The USA cannot afford another "boost and bust cycle" in the housing market, it will undoubtedly threaten financial stability. “It’s very important for us to get back to our 2% inflation target, but the goal is for that to be sustainable. And for that to be sustainable, we can’t have a boom and bust cycle in something like real estate,” Eric Rosengren warns.
Because of the mass chaos the 2020 pandemic created, the federal goverment put many support systems in place to help keep the economy flowing along. This includes (but not limited to) the $80 billion monthly treasury debt. Now that the pandamic is slowing going away, the federal goverment support needs to also fade away. Not doing so will only feed the financial instability in the American economy.
“I’m not predicting that we’ll necessarily have a bust. But I do think it’s worth paying close attention to what’s happening in the housing market,” he adds. “You don’t want too much exuberance in the housing market. I would just highlight that boom and bust cycles in the real estate market have occurred in the United States multiple times, and around the world, and frequently as a source of financial stability concerns.” - Eric Rosengren
Because of the mass chaos the 2020 pandemic created, the federal goverment put many support systems in place to help keep the economy flowing along. This includes (but not limited to) the $80 billion monthly treasury debt. Now that the pandamic is slowing going away, the federal goverment support needs to also fade away. Not doing so will only feed the financial instability in the American economy.
“I’m not predicting that we’ll necessarily have a bust. But I do think it’s worth paying close attention to what’s happening in the housing market,” he adds. “You don’t want too much exuberance in the housing market. I would just highlight that boom and bust cycles in the real estate market have occurred in the United States multiple times, and around the world, and frequently as a source of financial stability concerns.” - Eric Rosengren
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