Fed's Collins says work to lower inflation can create housing sector challenges
TLT•Boston Fed President Susan Collins said higher interest rates used to curb inflation can make homes more expensive to buy and build in the near term, while price stability benefits housing over the longer run.
1. Rates and housing
Susan Collins said delivering price stability can create near-term headwinds for housing, as higher interest rates used to cool the economy and keep inflation in check can make homes more expensive to buy and build. She said stable prices create predictable economic conditions that are good for housing over the longer run.
2. No policy outlook
Collins did not discuss the near-term economic or monetary policy outlook in her opening remarks at a Boston Fed conference on housing. The housing market has been hit by the Fed’s tighter monetary policy as central bankers work to lower inflation.
