This is a narration of our weekly Rent and Operating Trends Report.
The June consumer price index showed weaker inflation than economists estimated, with prices rising 20 basis points month-over-month. On an annual basis the CPI increased 3.0%. While the Fed prefers to monitor the personal consumption expenditures index for inflation, last week’s CPI release will be the final data point on inflation before the next Fed meeting. There has been heightened speculation that the Fed will raise interest rates again next week, after taking a pause in June. However, the Fed has also been transparent in its desire to bring inflation back to the 2-3% range. Now that price growth has cooled to that range, many economists are arguing for the Fed to keep their policy actions neutral. Momentum has clearly shown that inflation is slowing, based heavily on the monetary tightening the Fed has already enacted. Whether or not the Fed raises next week, the economic indicators have clearly displayed the need to end the tightening cycle.
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