Tags: robert shiller | housing | invest | rates

Yale's Robert Shiller: Invest in Housing as Fed Won't Be 'Reckless'

(Getty/Brendan Smialowski)

By    |   Thursday, 08 December 2016 01:30 PM

 

 

 

Nobel laureate economist Robert Shiller of Yale University, who helped develop the S&P/Case-Shiller housing price survey, believes now could actually be the time to buy into the real estate sector since he doesn't expect the Federal Reserve to launch a “reckless raise” of interest rates.

He told FOX Business Network’s “Cavuto: Coast to Coast” that he wasn’t too worried about record-setting stocks and rising housing prices right now.


“Mortgage rates are still low and there could be an upswing—a continuation of the upswing we’ve seen since 2012,” Shiller said regarding the housing market.

“It seems like if you look at the bond market it’s not exactly the bubble story. But there are big turning points in the bond market,” said the 2013 Nobel laureate in economics, professor of economics at Yale University and the co-creator of the Case-Shiller Index of U.S. house prices.

“One of them was around 1979-1980 when Paul Volcker took over the Fed. And interest rates were way in the double digit range. And they’ve been just coming down ever since. It’s not just the financial crisis—it has been a long trend down. And now they kind of hit zero. They can’t go much lower recently,” he said.

Shiller added that with Donald Trump and his “very strong personality” about to move into the White House, there could be a reversal of the trend.

“We could be in for higher interest rates, both at long and short end,” he said, adding that since inflation is still “under control” the Fed won’t do any “reckless raise” of interest rates. But he didn't explain his thinking.

Meanwhile, the stock market’s rise to record highs after Trump’s presidential victory shows that investors are optimistic that the economy will improve as President Barack Obama leaves office, says Charles Gasparino, author and Fox Business Network senior correspondent.

“His promise to cut both corporate taxes and red tape will translate into higher corporate profits so businesses can expand and create jobs,” Gasparino writes in the New York Post. “Real unemployment can finally decline not because people are dropping out of the workforce but because they’re actually working again.”

Trump will come into office with Republicans controlling the Senate and House of Representatives, making economic reforms a realistic possibility instead of prolonged gridlock. Under President Obama, the U.S. economy never exceeded 3 percent yearly growth for the first time since World War II.

“With the GOP controlling the House as well as the Senate, traders see real economic growth on the horizon, not just a Fed-induced stock-market bubble where interest rates are so low there’s no other place to put your money,” Gasparino says.

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Nobel laureate economist Robert Shiller of Yale University, who helped develop the S&P/Case-Shiller housing price survey, believes now could actually be the time to buy into the real estate sector.
robert shiller, housing, invest, rates
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2016-30-08
Thursday, 08 December 2016 01:30 PM
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