New Jersey Real Estate Digest: Fed Showing Interest in Housing Market

Thursday, September 21, 2006

Fed Showing Interest in Housing Market

In a press release on Wednesday, the Fed held the interest rate at 5 ¼ percent but changed in its language concerning the cooling U.S. housing market. The August 8th press release suggested holding the interest rate at 5 ¼ percent.

”Economic growth has moderated from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.”

The September 20th press release has a subtle difference in its language that could suggest the Fed is paying attention to the housing market.

”The moderation in economic growth appears to be continuing, partly reflecting a cooling of the housing market.

Whether this means they are considering taking some action or are just concerned is anybody’s guess, but the Fed is known for using subtle shifts in language as a precursor to some action to slow the cooling process.