Ben Jones at The Housing Bubble 2 reports that the Kathleen Hays thinks she knows:
No Federal Reserve official could ever publicly admit it, though everyone in the financial world seems to believe that it's true: the Fed is going to raise rates until it's taken the heat out of the housing market.
Coincidentally, Reuters reports that the president of the Federal Reserve Bank of Cleveland had this to say following a speech today:
The Federal Reserve has not set a numerical goal for its benchmark interest rate, Cleveland Fed President Sandra Pianalto said on Wednesday, adding the central bank will be guided by economic conditions.
Now, you might speculate that "economic conditions" is code for when the "heat" is taken out of the housing market. But you would be wrong,
"Our statement says we are continuing to remove that accommodation by continuing to change the fed funds rate," she said.
"Where we determine we are no longer accommodative again depends on economic conditions." These include both the strength of growth and the need for price stability, the Fed official added.
That seems like a pretty straightforward statement, and to the best of my knowledge no FOMC participant has listed extinguishing housing-heat as the driver of monetary policy or the benchmark for the federal funds rate ceiling. The way I see it, you can either trust the plain talk of the people actually making the decisions, or the mind-reading capacity of the media pundits. Take your pick.