The Fed seems to be intent on re-inflating the real-estate ‘bubble’. Wages have not gone up significantly, unemployment rate is understating employment(those who are unemployed past 6mos are not counted), underemployment may be significant, yet we are getting increases in RE prices approaching 25% annually. I wouldn’t call this ‘healthy’.
I think they are going to probe the market response with a statement that they ‘may’ continue QE for another quarter to prevent softening of the market. If the market responds upwards with this statement, they will delay easing QE. If the market responds with a drop – can’t predict but suspect they may ease off, though not as aggressively as planned (not that the reduction is really that significant in light of how much money has been ‘stuffed’ into the market). The only real ‘inflation’ I have been seeing is in RE and food prices (in that order).
–at least this is what my tea leaves are telling me. Swirl the cup again and they may read differently.
