Federal Reserve Chair Jerome Powell and his entire team should be cognizant of the fact that rents have been declining for many months. Despite this, Powell has been examining laggard data that persistently appears inflated.
After January’s disappointing ‘stall’ in the linear demise of inflation, consensus expectations were for a re-acceleration of the YoY decline in headline CPI (from 6.4% to 6.0%), and the actual print came in right on expectations (+0.4% MoM, +6.0% YoY). That is the lowest YoY CPI since Sept 2021…
While the market’s volatility this week has been focused on UK pension funds and budgets and systemic risk, this morning’s US CPI print will likely determine the next leg from here with expectations for an acceleration in core inflation and small slowdown in headline growth of consumer prices.
In the earliest phases of the pandemic, many of the nation’s large cities saw sharp rent declines as a subset of renters with newly remote working arrangements moved away from expensive downtown areas that had temporarily lost their vibrancy, in search of more space in the surrounding suburbs.