by Calculated Risk on 9/26/2005 12:03:00 AM

My most recent post is up on Angry Bear: Housing: Buy or Rent?

The inherent problem with the buy vs. rent calculation is estimating the future value of the house. As long as prices are going to continue to appreciate, it doesn't matter what you pay for the house. But when appreciation stops; price matters!

A couple of posts I recommend:

Dr. Duy's Fed Watch: Dejá Not A great series on trying to read the FED's mind.

"I continue to think that Greenspan & Co. are sending increasingly not-so-subtle messages that the days of low interest rates and easy policy are at their end. This is a message for Congress and the Administration, not just the financial markets. Indeed, something unexpected may be happening – a concerted effort to end any sense of a Greenspan-put in the markets or the economy as a whole. It will undoubtedly be interesting to watch this chapter in Fed history play out."

Responding to supply shocks Dr. Hamilton cautions about future FED Funds increases, at least until the full impact of Katrina can be assessed.

UPDATE: Two more on the FED:

Macroblog: Funds Rate Probabilities: Keep On Truckin' *AT Least One More Time)

And Dr. Polley asks some questions: Differing opinions on the Fed

I'll throw out these questions to the blogosphere: What are the dangers of a pause in the rate hikes? What are the chances that the market would misinterpret it and see it as a signal that the Fed is done raising rates or that they see recession on the horizon? If you were on the FOMC, what would you do between now and the end of the year to minimize that risk? Do you think that these risks would cause the Fed not to want to pause at all, but treat "measured pace" as meaning 25 b.p. per meeting until they feel they're at the neutral funds rate? Would that be good policy?

Best to all.