Weakness in the housing market did not stop the economic recovery from gaining a "firmer footing" during February and the first-half of March, according to the minutes of the Federal Reserve's monetary policy committee.
"Looking through weather-related distortions in various indicators, measures of consumer spending, business investment and employment showed continued expansion," the Fed minutes read. "Housing, however, remained depressed."
The Fed released the minutes of the March 15 Federal Open Market Committee meeting Tuesday afternoon. FOMC members noted that "declining house prices remain a drag on household wealth and thus on consumer spending."
They also commented that underwriting standards on single-family loans "remained tight and the volume of outstanding loans continued to decline."
Separately, Treasury secretary Timothy Geithner warned that the threat of government shutdowns could undermine the economic recovery and cause more problems for the housing market.
"Confidence is important for a recovery," Geithner told a Senate panel. "Forcing the government to live week to week" on short-term budget agreements, risks "undermining the recovery now under way," he said. "I think our first obligation to the American people is to reinforce business confidence and get more Americans back to work."
