Dominque Dwor-Frecaut on What Everyone Gets Wrong on Inflation, Recessions and Fed Policy
Macro Hive Conversations With Bilal Hafeez
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Contrary View on the Shelter Component of Inflation and Housing Market
This chapter discusses the contrary view that the shelter component of inflation, which is the largest component, is expected to pick back up again instead of falling. It highlights the shortage of investment in the residential sector relative to the demand, leading to an increase in the average age of dwellings in the US. The chapter also mentions restrictive zoning laws, particularly in coastal areas, which hinder the construction of affordable housing or multi-family housing near single-family houses owned by the wealthy. These factors contribute to the low level of vacancies and rents in the CPI not decreasing.
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