Federal Reserve Governor Jerome Powell said on Thursday that the U.S. housing finance system is still placing taxpayers at risk in a market dominated by government-backed agencies.
Powell went on to call for further reform aimed at rectifying an "unsustainable" situation.
A decade after uncertainties regarding the creditworthiness of mortgage-backed securities triggered a global financial crisis, systemic risk in housing remains, given the concentration of mortgages in the duopoly of Fannie Mae (FNMA) and Freddie Mac (FMCC) , Powell said.
While housing prices may have stabilized with credit flowing under tighter underwriting standards, Powell believes risk still exists.
"The status quo may feel comfortable today ... it is also unsustainable," he said.
What's Hot On TheStreet
Apple is OK for the time being: For those silently worrying how the Apple (AAPL) - Get Report iPhone 8 will sell, simmer down -- the tech giant still has several huge advantages. On the hardware side, for instance, the iPhone still feels ahead of the pack thanks not only to Apple's design skills and the visible features of its hardware, but also what's under the hood points out TheStreet's tech columnist Eric Jhonsa. From the looks of things, the iPhone 8 should extend that lead, Jhonsa predicts.
Tesla is looking wobbly: Tesla (TSLA) - Get Report shares are looking a little shaky (again) after its Model S didn't get a top rating from Insurance Institute for Highway Safety (IIHS), reports TheStreet's James Skinner. The IIHS cited issues with the small overlap front test, which is meant to simulate crashes into trees, poles and other vehicles, as why the Model S did not receive the highest rating. IIHS Executive Vice President David Zuby said the front test remains a "hurdle" for some vehicles.
"Tesla made changes to the safety belt in vehicles built after January with the intent of reducing the dummy's forward movement," IIHS said. "However, when IIHS tested the modified Model S, the same problem occurred, and the rating didn't change."
Costco finally scores some good news: After watching its stock crash about 13% inside a month thanks to fears Amazon (AMZN) - Get Report and Whole Foods (WFM) will dominate society, Costco (COST) - Get Report scored a nice win. Costco said same-store sales in June rose 6.5% in June. Canada saw sales up 3.2%, while international sales rose 6.2%.
The numbers should serve as a reminder how resilient Costco's business has been in the face of Amazon's rise.
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