Bernanke Denies Fed Rate Policy Caused Housing Bubble

Most evidence suggests the Federal Reserve‘s policy of low interest rates in the early 2000s didn’t cause the recent housing bubble, Chairman Ben Bernanke said Thursday in slides prepared for a college lecture.

While some have argued the Fed’s low interest rates in the early 2000s contributed to the U.S. housing collapse, international examples and the timing of the bubble show otherwise, Bernanke said Thursday in slides for the second of his four lectures at George Washington University this month.

For example, house prices rose sharply in the United Kingdom in the same time period, even though the U.K. had tighter monetary policy than the U.S., Bernanke wrote. He also noted housing prices began to pick up in the late 1990s before the Fed began cutting interest rates and rose sharply after the central bank began tightening.