Federal Reserve policy makers don't have the data to accurately tell whether US home values are overheating, Fed Chairman Alan Greenspan said in a response to a lawmaker's questions about the potential for a housing bubble.
"House price increases have outstripped gains in income and rents in recent years," Greenspan wrote as a follow-up to his July 20 congressional testimony. While that "raises the possibility that real estate prices, at least in some markets, could be out of alignment with the fundamentals," he added "that conclusion cannot be reached with any confidence."
PHOTO: AP
"House prices are difficult to measure given the enormous heterogeneity of the US housing stock" and because existing data "are not fully adequate," Greenspan said in the letter released today by Senator Richard Shelby, an Alabama Republican.
"Although taking a firm stand on the appropriateness of real estate prices is not possible, policy makers do need to take account of their influence on economic activity." The median selling price of an existing home in the US rose 8.7 percent in July from the same month a year earlier to a record US$191,300, the National Association of Realtors said in Washington today. The median price ranged from US$157,200 in the Midwest to US$275,000 in the West.
"There is no national price bubble in this country," said David Lereah, chief economist at the National Association of Realtors, in a press conference earlier today. "We have a supply problem. Inventories have been depleted, particularly in the West." The comments were received by Shelby's Senate Banking Committee on Aug. 17 and released today.
The responses expand on those Greenspan made in July as he delivered the central bank's midyear economic forecast in two consecutive days of testimony to the Senate Banking Committee and to the House Financial Services Committee. At the time, Greenspan said he expected a slowdown in consumer spending to be "short-lived" and that the Fed could continue to raise the benchmark interest rate at a "measured pace." The global economic recovery "has become both stronger and more sustainable" in the past year, Greenspan said. Even so, growth in Asia "appears to have braked sharply in recent months, as policy measures muffled the boom in the Chinese economy." Economic recoveries in Latin America and Canada "appear to be on track." In Japan, the country's economy "may finally be on its way to a self-sustaining recovery," Greenspan said. Growth in Japan and elsewhere in Asia faces "significant risks" from "the possibility of a hard landing in China," he said.
RESILIENCE: Taiwan plays a key role in semiconductors, energy, information infrastructure and advanced manufacturing, AIT Director Raymond Greene said Taiwan’s continued investment in deterrence and resilience remains vital, especially in uncrewed systems and other emerging technologies, American Institute in Taiwan (AIT) Director Raymond Greene said yesterday. Greene made the remarks at the annual National Strategic Summit on Supply Chain Resilience held by the Research Institute for Democracy, Society and Emerging Technology (DSET), a government-backed think tank. As Taiwan last year became the US’ fourth-largest trading partner and supply chain security is becoming more important, cooperation in emerging technologies continues to deepen between the two countries, he said. The US is committed to accelerating innovation, building key infrastructure, strengthening cooperation
The National Chungshan Institute of Science and Technology yesterday showcased its locally developed variants of the Vision 60 robotic patrol dog, which it plans to deploy on the nation’s outlying territories in the South China Sea. The variants were produced under the Joint Lab project — created by the institute and domestic companies — and assembled with domestically produced motors, lenses and artificial intelligence (AI) systems alongside licensed tech from the US, Missile and Rocket Systems Research Division deputy director Jen Kuo-kang (任國光) told the media event at a military base in Taipei’s Dazhi (大直) area. Taiwan has built up its strengths
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NOT IMMEDIATE: Taiwan has a chance to appeal the proposed 10 percent tariff before it starts, while other countries face a 12.5 percent tariff from the trade office Taiwan is among 60 economies determined by the US to have failed to impose or enforce a ban on the importation of goods produced with forced labor, according to a notice released on Tuesday by the Office of the US Trade Representative (USTR), which proposed imposing an additional 10 percent or more tariff on them. The USTR in a statement said that following an investigation, it had determined under Section 301 of the Trade Act of 1974 that the failure of the 60 economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is
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