Reply to Federal Reserve: signs abound that housing market is entering bubble territory

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]NP. Non IB, Non PE. Bla Bla Bla.

I don't think house prices are going down because we seem to now be in a price-wage spiral.

All of the people thinking that the interest rate rise will price people out of the housing market are not taking into account that wages will keep rising; it just won't mean anything in "real" dollars for the typical person.

A price wage spiral is corrosive and very annoying to live with, but the Fed will take it over the medicine truly required to correct inflation (a recession).

Sadly, the Fed's mandate doesn't matter; it is politicized and no one in Washington in any capacity has the guts to deliver unpleasant "medicine."

So, as in this weekend's WSJ says, get used to inflation people, and that includes in home prices. 
https://www.wsj.com/articles/inflation-hurts-better-get-used-to-it-11649507971[/quote]

You’re wrong. Nominal wages are increasing at a very slightly higher rate than pre-pandemic (1.2% more than the standard 3.5 to 4% growth). But real wages are declining due to inflation. [/quote]

Many economists believe we are just getting started. No one has a crystal ball, but we do know that once price-wage spirals begin they are historically difficult to contain. [/quote]

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