They also thought about raising 1/2 point, not just 1/4... I think it's housing that kept them from doing the right thing... as seen here in the UK, there's tremendous pressure on the central bank to keep rates low to keep housing prices high. That's sick and wrong, and they know it.
Although the Committee discussed policy approaches ranging from leaving the stance of policy unchanged at this meeting to increasing the federal funds rate 50 basis points, all members believed that an additional 25 basis point firming of policy was appropriate today to keep inflation from rising and promote sustainable economic expansion
The underlying pace of residential activity seemed to moderate in the first quarter. After unseasonably warm weather allowed a high level of single-family housing starts in January and February, starts fell in March to their lowest level in a year.
Sales of new homes also moved up in March, but their average in the first quarter was down substantially from the peak in the third quarter of last year.
House price appreciation appeared to have slowed from the elevated rates seen over the past summer. Growth in the average sales price of existing homes in March, versus a year earlier, decelerated sharply, and the average price for new homes in March fell compared to a year earlier. In addition, other indicators, such as months' supply of both new and existing homes for sale and the index of pending home sales, supported the view that housing markets had cooled
May 31, 2006
Posted by blogger at 5/31/2006