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Inside the FOMC's Quiet Housing Market Blind Spot
Description
In Episode 62 of The Federal Reserve Podcast with Fexingo, Lucas and Luna dive into a largely overlooked factor shaping Fed policy: the housing market's role in the inflation fight. With shelter costs staying stubborn—CPI shelter up 0.4% in May and the core PCE at 129.6—the hosts explain why the FOMC's models may be underestimating how long rent dynamics will take to cool. They discuss the gap between market-rate rents (already easing) and CPI's 'owners' equivalent rent' measure, which lags by 12 to 18 months. The conversation connects this to the Fed's recent hold at 3.63% effective rate, and what Kevin Warsh's first meeting signals about forward guidance. If you've wondered why the Fed isn't cutting despite good CPI headlines, this episode explains the hidden stickiness. Plus: a brief note on listener support that keeps the show ad-free. Recorded June 19, 2026.