Fed Targeting Housing Prices?

The Federal Reserve Board will continue to raise interest rates until it sees a slowdown in housing prices, according to economist Kathleen Camilli.The economic forecaster told a Federal Deposit Insurance Corp. seminar that the Fed may be willing to push up short-term rates, regardless of an inverted yield curve, in order to stop the acceleration in home prices. The Fed seems to believe "they can invert the yield curve and it doesn't mean a recession is coming," said the chief economist and director of Camilli Economics. She said she would prefer that the Fed pause from raising rates at its Jan. 31 meeting so that it can assess the impact of past rate hikes. She told the FDIC seminar that home price increases have declined and that the real estate market will probably correct on its own. The Camilli consulting firm can be found on the Web at http://www.camillieconomics.com.