Housing Warning from Federal Reserve Board Governor:

Via The Housing Bubble Blog:

"The Federal Reserve has no intention of preserving all of the recent gains in home price values, said Federal Reserve board governor Donald Kohn on Thursday. If real estate prices begin to erode, homeowners should not expect to see all the gains of recent years preserved by monetary policy actions,' Kohn said in a speech."

"In his remarks, Kohn attacked the popular 'Greenspan put' theory that Fed policy would always protect investors from sharp asset market drops while doing nothing to restrain these markets when prices rise. 'This argument strikes me as a misreading of history,' Kohn said. 'Conventional policy as practiced by the Federal Reserve has not insulated investors from downside risk,' he said."

"'Whatever might have once been thought about the existence of a 'Greenspan put,' stock market, investors could not have endured the experience of the last five years in the United States and concluded that they were hedged on the downside by asymmetric monetary policy,’ Kohn said."

“‘The same consideration apply to homeowners: All else being equal, interest rates are higher now than they would be were real estate valuations less lofty; and if real estate prices begin to erode. Homeowners should not expect to see all the gains of recent years preserved by monetary policy actions,’ Kohn said.”

Am I misinterpreting, or does the bolded quotation mean that the Fed has raised short-term interest rates higher than it would have otherwise in order to prick the housing bubble? [Which means, assumedly, that the Fed won't STOP raising rates until housing prices decline?]