1. CPI INFLATION
• The Consumer Price Index (CPI) rose 0.1% month-over-month and 5.0% year-over-year through March,
according to the Bureau of Labor Statistics’ latest release. It was the slowest monthly climb for prices
since December.
• Energy prices are down 6.4% year-over-year, with declines accelerating in March, falling 3.5% in March
compared to a more tepid decline of 0.6% in February.
• Food prices were unchanged between February and March. It was the first time that food prices were
unchanged or in decline since August 2020.
• Core prices have risen by 5.6% over the past 12 months, a ten basis points rise from last month, reversing
a five-month downtrend. Shelter cost increases explained the bulk of core-CPI’s uptick, which remains
up by 8.2% year-over-year despite decelerating on a monthly basis from February. Conversely, used car
prices continued to decline, falling by 11.2% year-over-year.
• Stocks fell following Tuesday’s CPI release as markets priced in the likelihood that the Fed will maintain its
aggressive policy stance at its upcoming May meeting. According to the Chicago Mercantile Exchange’s
Fed Watch Tool, futures markets now expect a 25 basis points hike in the coming decision.
2. INFLATION FOR RENTERS VS. HOMEOWNERS
• Personal inflation rates can differ widely depending on whether someone rents or owns their home.
According to Chandan Economics’ latest calculations, the adjusted CPI for renters was 5.1% year-overyear in March, slightly above the headline 5.0% year-over-year but was at its slowest annual pace since
April 2021.
• Meanwhile, the adjusted CPI for homeowners fell to 2.4% year-over-year in March, down a full percentage
point from February.
• Inflation rates are adjusted for each group based on the assumption that current homeowners would not
feel the impact of higher shelter costs, given that they have already locked in their monthly expenses.
Meanwhile, housing costs for most renters reset once per year, leading to a more inflation exposure.
• The inflation spread between these two groups has continued to widen. Through March 2023, the
difference between renter and fixed-rate homeowner personal inflation rates have reached another all-time high, hitting 2.6 percentage points.
