Tuesday, May 30, 2023

Yellen, Powell to discuss hot U.S. housing market


© Reuters. FILE PHOTO: Former Federal Reserve Chairman Janet Yellen speaks during a panel discussion at the American Economic Association/Allied Social Science Association (ASSA) 2019 meeting in Atlanta, Georgia, U.S., January 4, 2019. REUTERS/Christopher Aluka Ber


(Reuters) -U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell will discuss the hot housing market and its risks with fellow regulators on Friday, Bloomberg News reported.

The aim of the meeting would be to make sure the country is not vulnerable to a crisis similar to what happened in 2008, when the bursting of the housing bubble sent the U.S. and global economies into a deep recession, the report said.

Yellen’s team is aware that a sudden relapse in housing prices could pose a risk to the U.S. economy, the news agency said, citing sources.

However, the Treasury is confident that the financial stability risks associated with the sector are manageable, Bloomberg said.

St. Louis Fed President James Bullard made similar comments on Monday when he told the Wall Street Journal that he was worried that the central bank purchases risked overheating the housing sector.

“I am a little bit concerned that we’re feeding into an incipient housing bubble…I think we don’t need to be doing that with the economy growing at 7%,” Bullard told the Journal.

Yellen’s meeting with Powell will be the first time that the Financial Stability Oversight Council (FSOC) discusses concerns about the housing market in a substantial way, the Bloomberg report added, citing sources.

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