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Real estate: in the United States, the Fed has burst the bubble

2022-12-02T20:07:46.451Z


Within months, the US central bank burst the bubble it had created by keeping interest rates abnormally low since the start of the pandemic.


Washington Correspondent

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The 45% surge in the average resale price of residential properties in the United States from December 2019 to June 2022 could not last.

The decline that has been under way since the summer is correcting an unhealthy drift.

Far from being the result of a recession, since the United States is experiencing full employment, the reflux is desired by the American central bank.

It is even a privileged instrument through which the Federal Reserve intervenes to bring down demand in order to fight inflation.

Within months, the Fed burst the bubble it had created by keeping interest rates abnormally low since the start of the pandemic.

It has indeed ceased since March to accumulate in its balance sheet bonds pledged on real estate mortgages.

The disappearance of the artificial demand, born of the systematic redemptions of 40 billion dollars per month of these securities, caused mortgage rates to jump.

Last March, the borrower…

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Source: lefigaro

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