Rent Inflation Won’t Ebb Until 2026, Cleveland Fed Model Shows
- Cleveland Fed model suggests CPI metric will stay elevated
- Optics of high inflation make it hard to cut rates: economist
Jerome Powell
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Federal Reserve Chair Jerome Powell said last week central bankers are keeping a close eye on housing inflation, which “has yet to fully normalize.” They could be waiting more than a year.
It may take until mid-2026 for rent inflation in the consumer price index to subside toward its pre-pandemic norm, according to research by the Cleveland Fed. While several measures suggest that new rents in particular are coming down, fewer people are moving and signing new leases — so the sample in the CPI doesn’t capture as much turnover, the researchers said.