Certainly, analyses do indicate that house prices are abnormally high --- that there is a 'bubble' element, even accounting for factors that would support high house prices, such as low mortgage interest rates. So a reversal is certainly a possibility.
More Quotes from Janet Yellen:
It thus made sense to me to continue the gradual removal of policy accommodationJanet Yellen
A credible inflation objective could...enhance the flexibility of monetary policy to respond to the real effects of adverse shocks.
Janet Yellen
Prospects for growth in the year ahead are solid at the national level, and of course, this can only be good news for the Bay Area and California as well. The U. S. economy has shown remarkable resilience in the face of some severe shocks -- in particular, the surge in energy prices that began a couple of years ago and the devastation wrought by the twin hurricanes last summer.
Janet Yellen
A more doctrinaire Fed chief wouldn't have allowed the economy to grow this fast, but Greenspan argued that technology was creating productivity gains that would allow rapid, inflation-free growth. There were a lot of economists at the Fed who thought not tightening back then was very dangerous, ... The great accomplishment of the Greenspan Fed was recognizing that productivity growth would allow the economy to grow at a faster rate.
Janet Yellen
We all remember the bad old days of the 1970s ... the Fed's response went down as one the greatest monetary policy mistakes of my lifetime,
Janet Yellen
I consider it reasonable to put the current neutral rate in a range of 3.5 percent to 5.5 percent.
Janet Yellen
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