The Fed has its share of dim bulbs, but we can only conclude that San Francisco Fed President Mary Daly truly covets the title.
After all, with the Federal Housing Agency’s (FHFA) price index up by 12% in the last 12 months, which actually exceeded the previous record 10.6% gain at the peak of the last housing bubble in 2005, she recently unloaded this doozy:
In a recent interview at Barron’s, Ms. Mary Daly, President of the San Francisco Federal Reserve Bank, was asked about the red-hot housing market and whether the Fed should adjust its buying mortgage securities fueling home-buying. Ms. Daly said,
“People getting into housing because interest rates are lower and they can afford a mortgage is a positive development…One of the transmission mechanisms we have is to lower the interest rate. ….It has worked well…..I see this as a Federal Reserve win. Our monetary policy transmission mechanism is working.”
Holy cow!
Worked well?
Why in the world would any half-way intelligent central banker (oxymoron?) think that inflating the bejesus out of home prices at the highest rate of gain in 30 years is a “win”?