Housing remains atop of the list of economic headwinds, along with state and local government layoffs, Europe, and the end of the federal stimulus — and the Fed could use some help reinforcing the housing sector, William Dudley, president of the Federal Reserve Bank of New York, said Monday.
Speaking to Fordham University’s Gabelli School of Business in the Bronx, Dudley said that “growth in 2011 has been disappointing” despite the “waning” of important negative temporary factors.
“This sluggishness convinces me that other, more persistent factors must also be holding back economic growth,” adding to downside risks, he said.
“Problems in the housing market are a serious impediment to a stronger economic recovery,” Dudley said. “Obstacles to refinancing and access to credit for home purchases are limiting the support provided by low rates to house prices and consumption.”
“I do not think that monetary policy is all-powerful,” he said. “To get the strongest possible recovery, we need reinforcing action in areas such as housing and fiscal policy.”
