Derek Moore gives a contrarian take on the Fed raising rates. What if raising rates causes a major component of the CPI to increase rather than decrease? If the Fed raises rates, mortgage rates rise, demand increases for rents, and owner's equivalent rents rise? In this episode, Derek explains what is measured in the CPI and explains how OER or Owners Equivalent rent and rents are calculated by the BLS each month.

What percentage of the CPI is housing?

How is OER or Owners Equivalent Rent calculated by the BLS?

How mortgage rates impact the supply and demand of housing

Study showing housing rents increase during monetary contractionary shocks

Financing costs for home builders

How the construction of housing costs was changed by BLS in 1983

Discussing relationship between mortgage rates and housing prices

The type of inflation we are experiencing

Supply side vs demand side inflation

Mentioned in this Episode:

Contact Derek Moore [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Study referenced showing housing component rises doing contractionary monetary shocks https://onlinelibrary.wiley.com/doi/full/10.1002/jae.2679

How BLS creates housing data https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.pdf