I think we are looking at a bifurcated fixed income market, where bonds earn very low returns, and homes earn 5% or more, plus capital gains. I think the Fed Funds rate could be anywhere from 0% to 2% in this context without affecting monetary expansion that much, one way or the other. Because, the industrial economy is a high rate economy right now, but there is a surplus of capital, because there are too many frictions preventing it from getting into real estate quickly enough. But, when real estate can expand - probably early to mid 2016 - look out. Natural interest rates will be flying - both real and nominal.
MR. DUDLEY. “The Committee will carefully evaluate economic and financial market developments.” That means you are on the case.
CHAIRMAN BERNANKE. Well, it is not an analytical thing we are doing. We are just watching closely.
MR. WARSH. Keenly? Carefully?
MR. LACKER. Mr. Chairman?
CHAIRMAN BERNANKE. Yes. President Lacker.
MR. LACKER. Including “closely,” what does that imply about the opposite? I mean,
are we going to be able to take that out?
MR. WARSH. Well, we have done things like “in a timely manner” and other kinds of
MR. LACKER. Yes, but this is an adjective.
CHAIRMAN BERNANKE. No, it’s an adverb.
MR. LACKER. There goes my credibility. [Laughter]
Damn straight. Unfortunately, Lacker's grasp of monetary economics is even worse than his grasp of grammar. But, we can be glad that Bernanke was successful in helping him with the latter, if not the former.
- Arista Networks, Inc.CTO, SVP Software, 2004 - present
- There, Inc.CTO, 1999 - 2004
- Cisco Systems, Inc.Software Engineer, 1995 - 1999
- Stanford UniversityPh.D., Computer Science, 1993 - 2001
- Massachusetts Institute of TechnologyBS, MS, Computer ScienceComputer Science, 1988 - 1993
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