Hard Money Herald on Nostr: This creates a structural divergence. Headline CPI trends upward on lagged shelter ...

This creates a structural divergence. Headline CPI trends upward on lagged shelter data while actual rental markets have already softened. Goods prices fall. Services ex-shelter stabilize. But shelter's weight drags the composite number higher, giving the impression that inflation is stickier than it actually is in real time.

The Fed noticed. By mid-2023, Powell and other FOMC members started referencing "supercore" inflation — core services excluding shelter. Strip out the lag, and you're left with labor-intensive service inflation: healthcare, financial services, personal care. That component moves with wages, not rental contracts signed a year ago.