Fed's 2012 Transcripts: In 2012, Janet Yellen Debated Whether She Should Buy a House or Keep Renting

Features Dow Jones Newswires

The Fed's March and April 2012 meetings involved a housing market discussion of a personal nature: Janet Yellen's deliberations on whether she and her family should buy a house in Washington, D.C., or carry on renting.

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Fed governor Elizabeth Duke, making a point about how the psychology of the market will create upward pressure on prices, divulged at the March 2012 Fed gathering that then-Vice Chairwoman Yellen had found a house she was interested in buying and was considering making a higher offer because someone had come in and bid the price up.

"On Monday at lunch, she told me all about how beneficial it would be for her to buy rather than to rent," Ms. Duke told the room, adding "I can't believe I'm saying this, and it may embarrass me when these transcripts finally come out."

Minneapolis Fed President Narayana Kocherlakota remarked that Ms. Yellen "must be worried that interest rates are going up," which was met with laughter.

However at the Fed's next meeting, April 24-25, Ms. Yellen told colleagues that she didn't buy, and would be moving to a new rental property instead. "Needless to say, I hope that you won't interpret my family's decision as conveying any sort of broader significance about the housing market or the national economy," Ms. Yellen said. Dallas Fed President Richard Fisher quipped that "the market will be down 300 points."

A postscript to Ms. Yellen's decision not to buy: home prices hit their post-crisis low in February 2012, according to the S&P/Case-Shiller U.S. National Home Price Index. The index has gained over 45% since.

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-- Harriet Torry

(END) Dow Jones Newswires

January 05, 2018 15:09 ET (20:09 GMT)