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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Crimson Ghost who wrote (35613)7/8/2005 3:26:31 PM
From: ild  Read Replies (3) of 110194
 
*DJ Fed Hoenig: Doesn't See National US Housing Mkt Bubble

NEW YORK (Dow Jones)--Federal Reserve Bank of Kansas City President Thomas Hoenig said Friday the future course of monetary policy for the Fed will be driven by incoming economic events, but suggested that the central bank may have quite a bit of its rate tightening behind it.

"We have an economy that has been growing well," Hoenig said in remarks given before the Hastings, Neb., Chamber of Commerce. That strong performance has allowed the Fed to lift interest rates for the last year, and now, "we have a policy that is less accommodative," he said, indicating the degree of stimulus Fed policy is currently imparting to the economy. He added that "in a historical context, and in a policy context...it still remains a relatively accommodative policy overall."

The Fed met last week in a meeting where it hiked the central bank's overnight target rate to 3.25% from 3.00%. That rate stood at 1% a year ago, and many economists expect to see the Fed lift that rate to 4% by year's end. The Fed's goal has been to raise its overnight rate to one neither stimulative nor restrictive of growth, achieving a so-called neutral rate.

Hoenig told the audience that its very hard to know what that rate in fact is, and said, "I am not predicting what our policy is or should be." He also said that "we are very data dependent" and what happens with overall economic performance will determine how fast and far rates ultimately rise.
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