Here in the UK, there seems to be this incredible pressure on the central bank to take rates down, as housing prices have been declining to flat for a couple of years.
Those on the Ponzi Scheme, oops, I mean Housing Ladder, are irate that they're not getting appreciation anymore, and blame it squarely on the Bank of England. I'm waiting for the protests in the street demanding lower rates. And the BoE feels the pressure, expected to drop the key rate 1/4 point coming up, after doing the same last year.
So, the same fate in the US? Won't homeowners who see declining prices and declining paper net worth rebel against the rookie Bernanke, and the Fed? Won't they demand a halt to the raising of rates? This is especially interesting given Fed governor Kohn's remarks the other day about not being interested in protecting homeowners' gains these past few years.
I think Ben doesn't stop here, and 5.5% is a no-brainer. Any guesses?
March 27, 2006
The Fed is going to raise rates (again) tomorrow. Home sales and prices will continue to plunge. A Blame the Fed movement starts?
Posted by blogger at 3/27/2006