Fed Official: 'We Can Declare Victory on Housing'
May 20, 2013
The Federal Reserve should withdraw some of its housing policies aimed at boosting housing since the real estate market is well on its way to recovery, Dallas Fed President Richard Fisher told attendees at the National Association for Business Economics.
The Fed has been buying up $85 billion of Treasuries and mortgage-backed securities each month, which has helped to keep mortgage rates near historical lows.
“I think we can rightly declare victory on the housing front and [dial back] our purchases, with the aim of eliminating them entirely as the year wears on,” Fisher said. "I believe the efficacy of continued purchases is questionable." Fisher has long been a minority critic of the agency’s bond-buying program.
For the first time since 2005, the housing market added to growth last year, Fisher noted. Single-family home prices are on the rise across the country too.
Fisher said that he is concerned that if the Fed continues its purchases of bonds, it will distort the economic recovery.
"In my view, the housing market is on a self-sustaining path and does not need the same impetus we have been giving it," Fisher said.
The Fed’s next meeting is in mid-June to discuss its monetary policy actions, Reuters reports.
Source: “Fed should declare victory on housing, end MBS purchases: Fisher,” Reuters (May 16, 2013)
Updated: June 20, 2018