The driving force behind what little economic growth is now taking place in the world is, you might argue, America's housing market. The main impact of the Federal Reserve's six interest-rate cuts so far this year has been to trigger a slew of mortgage refinancings and other borrowing against the value of homes. This, in turn, has put extra cash in the hands of consumers, enabling them to spend more than might otherwise have been expected in the face of a sharp economic slowdown. It has also kept house prices strong—outside San Francisco and New York, two cities that are peculiarly sensitive to the stockmarket's fortunes—creating a benign "wealth effect" on consumer spending. That has taken much of the sting out of the malign effect of falling share prices.
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