Rising rents mean no shelter for Americans from inflation storm

For realtors, double-digit rent increases have been a boon for business. For the Federal Reserve, they serve as yet another hurdle in the central bank’s quest to get the worst inflation problem in decades under control.

With little relief expected in the near term, economists warn elevated rents will act as an accelerant, maintaining upward pressure on inflation even as consumer price growth stalls for other categories. It makes the US central bank’s job of tackling soaring prices all the more difficult.

“It’s going to be hard to say ‘we’ve got inflation under control’ if you still have shelter costs continuing to march higher,” said Sarah House, senior economist at Wells Fargo. She expects lofty rental inflation to persist until at least the end of the year, and despite some offsetting moderation in other goods and services, “that will complicate the task ahead for the Fed”.