Transcripts unsealed from a May 2006 meeting of the Federal Reserve indicate some concern about the housing bubble and the use of “exotic” mortgages by home buyers, according to a Jan. 13 article in the Wall Street Journal. But Fed Chairman Ben Bernanke described the slowdown of the housing market “a healthy thing” and an “orderly decline” that posed little threat to the U.S. economy.
“Again, I think we are unlikely to see growth being derailed by the housing market,” Bernanke said in the closed-door meeting.
Home prices, which peaked in May 2006, according to the S&P/Case-Shiller index, have since fallen 33%.
In another meeting later that year, in December 2006, Timothy Geithner, then president of the Federal Reserve Bank of New York, agreed that housing problems would not weaken the nation’s growth "[based] on our recent financial market da