During testimony before Congress on Thursday, lawmakers expressed concern to Federal Reserve Chair Jerome Powell that the central bank’s policies are decreasing Americans’ access to affordable housing.
Powell stated that inflation “has increased notably and will likely remain elevated in coming months before moderating.” However, Powell said that such inflation will be temporary. He did not reveal any intention to scale back the Fed’s $120 billion monthly bond purchases, which increase the supply of dollars in the interest of stimulating the economy. Sen. Pat Toomey (R-PA) questioned Powell on the Fed’s policy to buy a monthly $40 billion in mortgage-backed securities — which represents one-third of the $120 billion stimulus package.
“Housing prices across the U.S. as a whole increased in May by more than 15% from the previous year,” said Toomey. “15% clearly is making housing less affordable, more out-of-reach for more people.” Toomey noted that leaders within the Federal Reserve Banks of St. Louis, Dallas, and Boston are worried that mortgage-backed security buyouts “may be contributing to the current boom in real estate prices.”
“Are you at all concerned about the unintended consequences that are associated with $40 billion worth of mortgage-backed security purchases that continue month after month?” asked Toomey. “Housing prices are going up, as you mentioned, around 15%. This is a very high rate of increase,” said Powell. “A number of factors are contributing — monetary policy is certainly one of those factors. There are also other factors: people have very strong balance sheets, so they’re able to make down payments. There are also supply factors that are constraining the supply, at least temporarily.”
Media an Democratic gob. Corrupt. Destroying America every day!