Sorry I'm a little late on this.
Trends continue. The housing shortage continues to push rents up and the money shortage continues to push other inflation down.
First is the month-over-month graph.
Then is the trailing 12 months graph.
Notice on the monthly graph that the trend outside of shelter is down. Now, trailing 12 month non-shelter core CPI is at 1.4%. In the last 7 months, non-shelter prices are up 0.45%. In the 5 months before that, prices rose by 0.95%. In other words, annual inflation outside of shelter is unlikely to rise back up above 1.5% for quite a while. It is probably more likely that it will move below 1%.
moving up from low levels, but those are based on total inflation, which includes shelter. Core CPI is above 2% now when shelter is included. Five year forward breakeven inflation is under 1.6%.
Let's hope the hawks can be overcome quickly when this comes to a head. Our perpetual recession is its own sort of macro-prudence, I guess, so we've got that going for us.
It will be interesting to see what happens. If rent inflation continues to rise, it might encourage the hawks. On the other hand, if rent inflation falls under these supply conditions, that is a really bearish signal (like in 2007). I would take it as a signal of a potentially more severe contraction.
At the risk of sounding vain, I wish I could have gotten the book finished and in front of some faces 6 months ago. A public conversation about this would be useful.