Boston Fed, Report: Forecasting CPI Shelter under Falling Market-Rent Growth
Page(s): 20
“Our model appears to fit the data well, and the baseline specification is able to explain more than 50 percent of future movements in CPI shelter. Past changes in CPI shelter, past changes in market rents, and the difference between market rents and CPI shelter each play a role in predicting future CPI shelter. We apply these estimates to forecast CPI shelter. We find that CPI shelter will grow 5.9 percent from September 2022 to September 2023 and then 3.9 percent over the subsequent 12 months. These numbers suggest that CPI shelter will remain elevated.”