The Fed itself has targeted the housing sector through monetary policy, buying residential mortgage-backed securities in order to push interest rates down and provide further relief to mortgage-holders.
While some have argued that Germany would be better off leaving the monetary union, its financial sector remains in close contact to the broader European economy, making it difficult for Merkel and the rest to give up.
His theory asserts that private sector decisions sometimes lead to unexpected downturns in the economic cycle and, therefore, the public sector, including monetary policy actions by the central bank and fiscal spending by the government are needed to stabilize output.