Yellen, Powell to discuss financial risks of hot housing market

Bloomberg reports that treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell are slated to discuss the hot U.S. housing market and the risks it could pose to the financial system at a meeting with fellow regulators on Friday.

The aim of the closed-door session: To make sure the U.S. is not vulnerable to a crisis akin to the one it suffered more than a dozen years ago.

The meeting of the Financial Stability Oversight Council, or FSOC, that’s headed by Yellen will come on the heels of two days of testimony by Powell to Congress on the Fed’s semi-annual monetary policy report.

Friday’s session will be the first time that Yellen’s FSOC will discuss concerns about the housing market in a substantial way, according to people familiar with the matter. 

The Treasury is increasingly aware of the dangers that a sudden relapse in property prices could pose to the economy after a sharp run-up on the back of a low inventory of homes for sale, according to the people familiar with the matter.

But Yellen’s team is confident that any financial stability risks are manageable, the people said.