Relief for Renters Will Prolong Fed’s Wait to Hit Inflation Goal
- Surging apartment supply will probably restrain rent increases
- To propel inflation, other prices will need to take up slack
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Welcome news for America’s renters could be unhelpful for the Federal Reserve.
A 42-year high in the number of apartment buildings under construction points to an impending surge in supply that portends a moderation in the cost of shelter, which in June capped the biggest 12-month jump in almost a decade. Any cooling in the most pronounced driver of inflation means the Fed will have to wait even longer to reach their 2 percent price target -- a prerequisite for some policy makers to raising interest rates.