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Former Federal Reserve Board Governor Wayne Angell on Federal Reserve policy and its impact on the housing market.
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Speaking need to be ready for when the Fed changes which -- money right.
When it changes its stance but what are the chances of that.
Perspective from somebody who's been on the inside of the Federal Reserve decisions joining us now from Washington DC and a Fox Business exclusive.
Wayne Angell former Federal Reserve board governor -- I think it's fair to say nothing surprising here or not I don't know I don't like to speak for my guests but.
Now you know and then nothing surprising it's just what we would have anticipated.
And had their daughter reasons for that.
But Jack I wanna look a little farther ahead -- and suggest that.
That bad sheriff and bazaars price they're probably.
More strongly.
Because and they had a -- and -- -- -- price to validate commodity prices declining.
What do -- plus you about where.
Worst -- anyway.
And it would make for a -- better trends Asian.
To -- growing economy.
As little share occur and 2013.
Could you explain to our viewers what you mean by price stability.
What I mean by obliged to -- he has done their risk.
Prior says rising.
It is exactly the same as the risk of prices falling.
And and that's what attention did.
And it it does that then that they had world be leaning against a market.
Where the market slows down.
And -- -- prices fall.
So let's say it's a rate of change -- -- prices.
You're year over year that I think it's very very important that right now.
It's about the same commodity prices are about the same as there were.
That he directional.
We have won't believe that were -- as a get a 102013.
Let's go to the housing market weighing -- -- we got the new home sales today and while they look pretty good up five point 7% in single family homes in the US are muscling up just a bit at least the sales of them -- We also got from the -- from -- association indications that three -- and mortgage applications have slowed down.
-- -- In -- -- and and you tell me in -- -- showing that all of that money forty billion a month from QE3 that the Fed said it would do to prop up this housing market already is kind of Peter ring out.
We're out.
It just doesn't -- terror in regard to -- new commercial bank lending.
That is at H -- There's a reluctance.
To go in there and your mortgage loans and that reluctance -- arms.
Because we've had a very strong shaft.
And regard terra -- deregulation.
That is -- -- power ought to stay rather constant all of the -- cycle.
And what we have now is whereas it was very loose and I a lot of lending taking place.
Four years -- -- In British -- to being.
Overly tight and ends -- crotch grab -- the Fed's liquidity doesn't get through right into the lead the market.
What do you expect and this could be way out up because they've already -- 2014 we will see low prices until at least 2014 what do you expect for the Fed to get a bit more hawkish and of course.
As we know with an election coming up we could see -- change at the top important to note that Federal Reserve keeps -- four year terms.
So he decides whether he's going to -- began an -- -- both these guys but obviously Mitt Romney is not been very conciliatory toward Ben Bernanke.
Well.
-- -- Romney.
Mitt Romney is looking bombshell blonde.
That will put more emphasis upon price stability.
-- and that's understandable.
It does seem to make it that's a transition.
-- are fully growing economy.
Will be much better if we look at the price indicators.
Rather knocking at your unemployment.
Rick you're gonna let me NRA Wayne what happens if a new guy comes in and he tightens rates earlier rather than later does that deal rail -- tentative recovery or improve it.
Route not really because I've known -- chairman is not a command.
And immediate may change policy.
A change of policy will be rather gradual and -- -- -- to get.
And version is upon the discussion.
Moving towards.
Are tighter policy.
And that will occur I don't -- -- Where -- rising house prices.
-- -- -- they.
They they V.
Mortgage.
Mortgage rent equivalent try harder to to move up and that -- show up for non core inflation rate.
-- -- -- -- -- To be out ahead of that.
Rather than falling died.
Now a little bit ahead would be a good idea why they still former Federal Reserve board governor speaking to was exclusively it's all about price stability is -- sees it thank you so much.
Your world.
