Dananjoyo Kusumo / Jurnal Nasional
The pendulum has probably swung too far.
Jurnas.com | FEDERAL Reserve Chairman Ben S. Bernanke said the central bank’s efforts to spur economic growth are being blunted by impediments to mortgage lending, and he called for further steps to heal the housing market.
“We have helped lower mortgage rates to the lowest point in many, many decades,” Bernanke told homebuilders today in Orlando, Florida. “Yet we are not seeing as much activity as we would like to see.”
Bernanke, who repeated that the pace of the recovery has been “frustratingly slow,” didn’t discuss the outlook for monetary policy. He devoted part of his speech to recommendations from a Fed study on housing that was sent to Congress last month and which prompted criticism from some lawmakers, who said the Fed has overstepped its authority.
“The state of housing and mortgage markets may also be holding back the recovery of our financial system and the normalization of credit conditions,” Bernanke said today to the National Association of Homebuilders International Builders’ Show.
Referring to the high standards of lenders following the housing bust, Bernanke said that “some tightening was no doubt necessary.”
“That being said, the pendulum has probably swung too far in the other direction by this time,” he said. “Conditions are still too tight for the health of both the financial system, for the construction industry and for our economy. ” Bloomberg