Tuesday’s 5% plunge in the NASDAQ followed a higher-than-forecast August year-on-year rise of 8.3% in the US Consumer Price Index. Shelter, which represents almost a third of the index, accounted for most of the surprise, rising 8.6% year-on-year, according to the Bureau of Labor Statistics.
The only surprise is that investors didn’t see this one coming.
I’d warned a year earlier that “US rent hikes will explode consumer inflation in 2022.” After all, today’s rent inflation shows up in tomorrow’s Consumer Price Index as leases expire. The August 2022 jump in rent inflation is just the beginning.
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