The Fed does not target home prices, so it would only care about renewed overbidding if the bidding showed up in its inflation measures. Set the rate prediction in the question aside, since nobody can promise where rates land by any date. The Fed's two mandates are full employment and price stability, and housing enters the picture only through the second one. It does enter, indirectly. A large share of the disinflation in recent cycles came from housing-related components of the indexes, things like owners' equivalent rent and lodging away from home, cooling off. If home-price and rent inflation reversed and started climbing again, those components would eventually push back up, and the Fed would notice. The catch is timing. Shelter measures are heavily lagged and clunky in how they are built, so the Fed tends to spot turns late, as it did with inflation on the way up and again on the way down in prior cycles. So the framework answer: the Fed would not welcome a reacceleration, and it would likely be slow reacting to one. What any of this means for your mortgage rate still routes through the bond market's read on inflation, which is the thing worth watching rather than any single Fed comment.