US Inflation Remains Stubbornly High Despite Fed Rate Hikes

By Fan-Yu Kuo
NAHB – Eye on Housing
October 13, 2022
Category: Finance & Economics
Region: United States

Consumer prices eased in September for the third-straight month as declines in energy prices partly offset increases in food and shelter indexes. Despite this slight improvement, inflation remains above an 8% year-over-year rate for the seven straight month. The food and shelter indexes continued to rise at an accelerated pace, with the owners’ equivalent rent index seeing the largest monthly increase since June 1990. Though it is likely that both core PCE and CPI measures of inflation have peaked, the Fed is expected to remain aggressive with respect to tightening monetary policy. It is also worth noting that higher interest rates will have limited effects on rising rent (a function of a lack of attainable housing) or the ongoing labor shortage. …The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.6% in September, following an identical increase in August.

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