DECRYPTION - Monetary policy is driving up the cost of credit, to more than 6%. The number of sales and prices are falling.
If there is one sector of the US economy that is bearing the full brunt of the effects of the Federal Reserve's belated crusade against inflation, it is that of residential real estate. The number of home resales, for example, fell in August, for the seventh consecutive month. Unheard of since the great subprime crisis, in 2007. The number of transactions is now 20% lower than in August 2021.
However, the central bank has no mood. By again raising its main key rate by 75 basis pointsWednesday, the Fed knows full well that it will aggravate the contraction already underway in this sector.
Jerome Powell even seems convinced that he is acting in the interest of the real estate market by precipitating the bursting of a bubble: “We are likely headed for a correction after a period of white-hot price increases that have driven home ownership to a level beyond the reach of many…