Your No-Rent-Paying Child Is an Inflation Fighter
A record number of people are living rent-free with friends or family. That's great for fighting inflation and for the central bank.
The tight rental market may be loosening.
Photographer: Mario Tama/Getty Images
It’s generally accepted among economists and investors that the Federal Reserve has an impossible task of getting inflation under control without broad and lasting damage to the economy. It’s time for a reality check. In fact, it’s looking more and more like the central bank may have a far easier time curbing inflation than is widely expected.
The reason why is that deep structural shifts in the economy caused by the pandemic, changes in the composition of the housing stock and an evolution in cultural norms have made household formation much more flexible than anytime in the past. Perhaps more than anything, it’s that last point that will be the difference between an economy that requires a sharp rise in unemployment to bring down inflation and one that simply needs a brief but firm tap on the brakes.