The Bicoastal Housing Bubble
Speculative "bubbles" can appear in various sectors of the economy when the Federal Reserve eases monetary policy by lowering interest rates. Generally speaking, when the Federal Reserve tightens monetary policy, the sectors of the economy that went up the most during the easing phase will fall the hardest as the bubble bursts. For instance, stocks went up the most from 1995 to 1998, when the Federal Reserve eased the money supply; stocks fell the most after the Federal Reserve tightened the money supply in 1999 and 2000.