Podcast: The Fed’s War On Inflation

Today’s Podcast goes over the Fed’s fight against inflation, especially after the most recent CPI report. We talk about the damage that this can create. Also, I discuss how the mortgage rate lockdown premise is forming due to historical events since 2020.


This week on CPI Tuesday CNBC asked me to talk about rent inflation and the Mortgage Rate Lockdown premise. I tried to convey to the audience that the growth rate of rents falling in the CPI data is more of a 2023 storyline.


Of course, it was hard for me to convince people that home prices can overheat in this low inventory environment, especially when everyone went into housing crash mode in 2020/2021.

Even to the point of writing articles saying we needed rates to rise to cool housing down because total inventory in America broke to levels we have never seen in U.S. history, and we have over 330,000,000 people now.

Even more difficult was to convince shelter rent inflation was about to take off. The same premise as always, rental vacancies have been falling for years; this was an alarming trend for the years 2020 to 2024.

Summer of 2020, I tried to stress that cities aren’t dying, people need somewhere to live,
Rent inflation can grow.

Shelter inflation was left for dead, but by the summer of 2020, it had already bottomed; this data was lagging behind the reality of what was happening. In 2021 before the CPI data took off, I told the Washington Post that rents are about to rise and have staying power significantly if wages grow.

Always keep it simple, it’s supply and demand with rent inflation, and the data supported this bad trend for years, but in 2020-2022 we all paid the price for not having enough supply for home buying and rent. This is a once-in-a-lifetime historical event for the United States of America. 

Remember, none of this is a positive for the U.S. housing market. My 23% price growth model was smashed in 2 years, shelter inflation eats into income, which makes it harder for renters to do more with their paycheck. Obviously they make enough money to pay the rent and the majority of renters pay on time. However, when we look back at the history of U.S. economics. The people that said housing inflation is fake news and that we are on a verge of Japan style housing deflation story from 2012-2019, whiffed in the biggest fashion on record.

“We have always held to the hope, the belief, the conviction that there is a better life, a better world, beyond the horizon.” Franklin D. Roosevelt

Logan Mohtashami is a Lead Analyst for Housing Wire, financial writer, and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami, now retired, spends his days and nights looking at charts and nothing else