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What the Federal Reserve Got Totally Wrong about Inflation and Interest Rate Policy
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What the Federal Reserve Got Totally Wrong about Inflation and Interest Rate Policy

Getting Real About Rents

Daniel Alpert
Cornell Research Academy of Development, Law an..., 2019
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Editorial Rating

8

Qualities

  • Analytical
  • For Experts
  • Hot Topic

Recommendation

The Federal Reserve increased its target Fed Funds rate four times in 2018, and  the last move in December sent equity markets into a tailspin, with a massive loss of financial value. In 2019, Fed officials have signaled a hands-off approach to further rate hikes. Economist Daniel Alpert analyzes Fed policy on interest rates, with a keen eye focused on housing and rental prices and their effect on overall inflation. Business leaders and policy experts interested in a deep-dive examination of inflation and Fed machinations will appreciate this authoritative report.

Take-Aways

  • The Federal Reserve’s 2018 interest rate hikes came even as the global economy stalled and US growth numbers sputtered.
  • The Fed appears to have misinterpreted inflation data related to housing prices and rents.
  • As of 2018, costs for rent and Owners’ Equivalent Rent (OER) account for more than 80% of the core Consumer Price Index increase.

About the Author

Daniel Alpert is a professor at Cornell Law School and founding managing partner of Westwood Capital LLC.

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