"...you wouldn't put all your weight on inflation side just as you wouldn't put all your weight on the labor side."
- William Dudley, Federal Reserve Bank of New York President
Existing home sales in the United States decreased for the first time in last five months, falling by 1.8% in August on a monthly basis to reach 5.05 million. Data for July was revised slightly downwards to 5.14 million units. The indicator is still below the 5.38 million sales, posted back in July 2013. Analysts confirm that during summer months sales were experiencing a seasonal increase, while now the correction takes place. Investor purchases, in turn, dropped to its lowest level in five years, partly explaining the overall plunge. As the Federal Reserve is preparing to raise interest rates and tighten monetary policy in foreseeable future, home buyers are getting more concerned about perspectives of the property market in the country.
Continuing about the Federal Reserve, a FOMC member and the New York Fed President William Dudley spoke on Monday's evening. Being one of the most insistent defenders of the stimulus program and low interest rate policy, Dudley said that changes are possible and they will depend on economic development. Moreover, he noticed that nowadays the monetary policy is working in a different way than it did in the past, meaning that more attention should be paid to the labour market. However, policy makers should find a balance between unemployment and inflation to make any significant changes to the monetary policy stance.
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