Federal Reserve Chairman Ben Bernanke may have stopped in Cleveland to speak about emerging market economies, but his comments during the Q&A session that followed, which included addresses on housing, are garnering all the attention.
Repeating statements he made at a much-followed speech in August, Bernanke called on Washington to take greater steps in shoring up the economy, particularly the nation’s struggling housing market.
“Strong housing policies,” Bernanke said, would ultimately be needed to “to help the housing market recover,” in addition to policies focusing on jobs and budget imbalances.
Bernanke cautioned, though, that any systematic changes to housing, such as a spinoff of Fannie Mae or Freddie Mac, would take some time to work out.
“There’s pretty general agreement that whatever reforms need to take place” will probably “take some time,” Bernanke said.
To the Fed’s credit, it has been attempting to jump start housing with a new wave of monetary stimulus. Its “Operation Twist” strategy involves the purchasing of hundreds of billions of securities to drive down mortgage rates, and if today is any indicator, it seems to be working; 30-year FRM just hit the lowest level in the history of Freddie Mac’s record keeping.
Whether those low rates inspire additional housing investment, though, waits to be seen.