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Rent inflation could remain elevated
The WSJ Timiraos tweeted that the KC Fed is out with a report saying:
- There may be a false dawn in easing rents
- a return to pre-pandemic rates of rent inflation it could remain elusive
- Tight labor markets suggest rent inflation is likely to remain elevated
- rent inflation contributed more than 3 percent to core CPI inflation in 2022:Q4.
- Prior to the pandemic, when inflation was running near 2 percent, rent inflation was contributing only about 1.5 percent to core CPI inflation.
- Even if goods inflation continues to normalize, rent inflation would also need to meaningfully decline to return inflation to 2 percent.
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