Wall Street has focused on Federal Reserve monetary policy while Fed minutes reveal growing concern among some policymakers about the housing market. The housing sector's slump has dragged on and triggered alarms because residential investment and construction often lead overall economic activity. Participants observed that economic growth slowed in the first half of the year, driven largely by slower consumption and a decline in residential investment. Housing was one of several concerns, alongside the labor market, tariffs' effect on inflation, real income growth, elevated asset valuations, and low crop prices. A few participants noted weakening housing demand, increased inventory, falling house prices, and flagged housing as a potential risk to jobs.
"Participants observed that growth of economic activity slowed in the first half of the year, driven in large part by slower consumption growth and a decline in residential investment," the minutes, which were released on Wednesday, said. To be sure, housing was just one of several concerns that policymakers raised. Others included the labor market, the effect of tariffs on inflation, real income growth, elevated asset valuations, and low crop prices.
But Fed officials were also specific about their housing market worries, suggesting they were starting to pay more attention to the data. "A few participants noted a weakening in housing demand, with increased availability of homes for sale and falling house prices," the minutes said. And not only did housing show up on the Fed's radar, policymakers flagged it as a potential risk to jobs, along with artificial intelligence technology.
Collection
[
|
...
]