Converting real estate owned to rental Let me turn now to the effect on the housing market of properties acquired by creditors through foreclosure, commonly called real estate owned, or REO. An estimated 1 million or more properties will likely pass through REO inventory in 2011, with another million or so per year expected in both 2012 and 2013.
That risk was heightened by the fact that “core” inflation, which strips out energy and food, was also low. Core inflation is not our objective, but it tends to lead headline inflation over the medium-term. All this called for a monetary policy response. And we chose to respond by recalibrating the APP because we have ample evidence that it works.