The same considerations apply to homeowners. All else being equal, interest rates are higher now than they would be were real estate valuations less lofty, and if real estate prices begin to erode, homeowners should not expect to see all the gains of recent years preserved by monetary policy actions.

149

If the past is any guide, the effect of rising interest rates is likely to be felt most visibly in housing markets.

134

At this juncture, given the apparent strength in demand and the narrowing margin on unused resources, I am focused on making sure that inflation and inflation expectations remain well anchored. I do not know how much policy firming will be needed to accomplish this objective.

98