[svachalek]

They don't raise mortgage rates, they raise the rates at which banks pay each other for overnight loans. But this tends to affect all other rates indirectly, including mortgages. They've only got one tool and it's a giant sledgehammer. From the looks of it they're trying to crash the economy, but avoid wrecking it so badly they can't start it up again.

The Fed can't do anything about housing supply. Mostly it's zoning regulations preventing it, lower mortgages to bring out the buyers might help a little but even when the market was roaring we hardly built anything.