Houses and cars would not be providing the impetus to economic activity they often have in past recoveries, but they do not appear set to replicate the experience of fiber-optic cable. We are making inferences from very inexact proxies for desired stocks and sustainable prices. No one could definitively rule out the possibility that home construction and prices could drop sharply.
Undoubtedly this will occur in some local markets, and it could become widespread. But the odds would seem to favor a more measured response to the inevitable tightening of policy as the recovery in business investment picks up steam, consistent with keeping the economy on a sustainable growth track rather than becoming another source of macroeconomic instability.