The new Cleveland Fed housing data shows lower inflation

New data from the Federal Reserve Bank of Cleveland, regarding housing inflation, shows that one of the key drivers of rising prices may be less of a problem in the future.

The bank launched new indexes that track rental price changes. Housing-related factors are the main components of the Consumer Price Index (CPI), accounting for a third of it.

According to the Bank, the annualized change in the CPI for new tenants was 6.03% in the third quarter. This indicator decreased compared to the previous one, when it was 11.88%. The Cleveland FRB data give new hope for the continuation of slowing inflation trends.

At a press conference after the Fed meeting on Dec. 14, central bank leader Jerome Powell said that rent growth was gradually decelerating.

The Fed Governor noted the expiration of contracts and the need to renew them. He also noted that the cost of rent increased compared to the point, when the contracts between tenants and landlords had been only signed.The expert added that as soon as the backlog is eliminated, inflation will decrease. According to Powell, this will happen next year.