Economics
If You Want to Know Where US Inflation Is Heading, Look at Rents
- Housing costs play big role in measures of underlying prices
- Rent may be close to topping out, but won’t cool any time soon
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The Federal Reserve’s attempt to get a clean read on post-pandemic inflation has focused attention on gauges that elevate housing costs, which is why what happens to rental inflation will factor heavily into the future of monetary policy.
The good news is rental inflation may be close to topping out after advancing almost 6% in the 12 months through July. The bad news is it will take a while to settle back down to anything resembling pre-coronavirus norms.