1) SF Fed paper "finds national homeowners’ shelter prices rose 4.3% Y/Y in July 2022, compared with 5.8% in the CPI measure" based on actual payments.
- OER based on the “implied rent” that owners indirectly pay to ...
2) live in their homes. Implied rent cannot be observed, so the CPI uses an estimate (i.e. very imperfect, lagged and difficult to model as I've discussed).
Magnitude of shelter #CPI has surprised most, including Nobel laureates, Harvard professors, GS economists (who today ...
3) adjusted their model and increased '23 shelter inflation estimate).
But haven't seen any evidence that this is their intention (sell bills to buy back off-the-run-Treasuries). If Treasury matches tenor by selling on-the-run-Treasuries instead, liquidity of older bonds will improve but market impact is quite different.
3) If anyone has any insights here, would love to hear from you.