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Federal Reserve Chair Janet Yellen appears before the Senate Budget Committee to examine the nation's economic and fiscal outlook, on Capitol Hill in Washington, Thursday, May 8, 2014.
Federal Reserve Chair Janet Yellen appears before the Senate Budget Committee to examine the nation's economic and fiscal outlook, on Capitol Hill in Washington, Thursday, May 8, 2014.
(J. Scott Applewhite/AP)

Fed sounds alarm over U.S. housing rebound

Benjamin Tal, the No.2 economist at Canadian Imperial Bank of Commerce, says Stephen Poloz’s Bank of Canada is poised to be the “most powerful central bank in the universe.” To explain what he means, consider the Federal Reserve’s sudden worry about the state of the U.S. housing market.

Mr. Tal, who made the comment last month in an interview, wasn’t talking about Canada’s central bank usurping the Fed as the institution that sets the tone for global financial markets. Rather, Mr. Tal posited that a generation of first-time home and automobile buyers reared on ultra-cheap money will be supersensitive to even the slightest of increases in interest rates.