A Fed official is speaking today. "The U.S. housing sector may already be cooling but it should maintain its lofty level and not undermine the economic expansion, St. Louis Federal Reserve Bank President William Poole said on Wednesday. Poole did say there was some evidence the housing market might be experiencing some sort of slowdown after its strong gains in recent years. But he explained this was already factored into the U.S. central bank's thinking."

"'As noted in the minutes of the FOMC meeting held on January 31, 2006, policy-makers are expecting some weakening in housing construction,' Poole said."

"And he played down worries of wider disruption from the bursting of a housing bubble, which he did not believe existed at a national level, though some markets may have overheated: 'The conventional view, which I subscribe to, is that a housing price bubble does not exist on a national average basis, but there may be pockets ... where prices have risen beyond levels that can be justified by economic fundamentals.'"

"Poole repeated the Fed's long-standing mantra that it was not possible for policy-makers to identify bubbles in advance, an argument they use to justify not intervening to curb price rises in any asset market. 'Given that bubbles always burst, if there is no burst, then there was no bubble, clear advance evidence of a bubble can never exist.'"

"'If the evidence were clear, then everyone would know about the bubble and forthcoming burst, but then the buying that created the bubble would not occur in the first place,' he said."

"'So if you have an academic interest in house prices, I recommend that you wait a few years. If you have a direct financial interest, I can't help much, you're on your own,' he said."