Policy will cut the risk of booming house prices
Keyword(s):
The Us
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Significance The government in New Zealand, where the market is particularly buoyant, was the first to react in February. It now requires the Reserve Bank to consider house prices when setting monetary policy. Other governments and central banks have shown little sign of following suit. Impacts Calls are rising for the US Federal Reserve to taper its purchases of mortgage-backed securities, but it will remain cautious. Rising financial stability risks and house price booms increase the risk of insolvency for borrowers and non-performing-loans for banks. Higher house prices add indirectly to consumer price inflation if they push up rents, but this link takes time to materialise.
2018 ◽
Vol 36
(6)
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pp. 539-551
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