#美国10月CPI全面超预期 #每周来晒 The Warning Sign of Rising Rents—Commentary on October U.S. CPI

October U.S. core CPI exceeded expectations. Particular attention should be paid to the rise in the rent component: it has bottomed out and rebounded, which could make a return of inflation to the 2% target seem indefinitely out of reach. In recent months, month-over-month increases in rent and housing services have continued to rise, showing signs of breaking higher. In addition, U.S. rents, a leading indicator, had already begun rising earlier. Given their high weight, this means inflationary pressure could surge in 2027. If the relevant components show no improvement in the November-December data, the 2027 rate-hike path may need to be revised sharply higher. On the one hand, a higher inflation baseline will require more tightening by the Fed; on the other, the current rise in rents may itself be a negative feedback response to excessively high mortgage costs (people are not buying homes but renting), which rate hikes cannot effectively curb. This means prices of other consumer goods will have to be brought down further, requiring additional Fed rate hikes. For markets, the endpoint of the rate-hike cycle will be difficult to determine in the near term, which is unfavorable for all asset classes.

October core CPI rose broadly again, showing signs of intensifying inflationary pressure
In October, U.S. core CPI rose 0.30% month over month, versus 0.33% last month. Although it edged down, the absolute level remains high, and the annualized rate is far above the target. Among the major components, month-over-month increases in core services were significantly higher overall than in core goods, and most components posted relatively high monthly increases, rather than the rise being driven by any single component. Compared with September, growth accelerated in medical equipment and auto insurance, while used cars declined markedly.

Structurally, watch the significant risk of a sustained rise in the rent component
Last month, core CPI unexpectedly rose to 0.33% month over month, with housing services increasing 0.4% month over month, making the largest contribution. This month, housing services eased slightly month over month but remained at 0.3%, with the owners’ equivalent rent component flat at 0.3% month over month. This development warrants close attention: the bottoming and rebound in the rent component could make a return of inflation to the 2% target seem indefinitely out of reach.

Housing services account for more than 30% of overall CPI. Their weight in PCE is somewhat lower, but still in the 15-20% range, and their trajectory has a significant impact on overall inflation. During 2024-2025, one major reason overall core CPI was able to decline steadily was that rent-related CPI indicators entered a long-term downcycle, with month-over-month increases in housing services remaining in the low range of 0.1-0.2%. Now, however, housing services have risen by more than 0.25% month over month for three consecutive months and by more than 0.3% for two consecutive months, seemingly indicating a higher baseline. In addition, rent, a core component of housing services, typically lags real-world rents in the CPI by about one year. Since 2026, U.S. rents have begun a new upswing (the market believes this may be related to high home prices, heavy mortgage burdens, and housing demand shifting toward the rental market). If this trend is extrapolated linearly, the CPI rent component will also face sustained upward pressure in 2027. Once month-over-month growth in housing services overall remains at 0.3% or even higher, given its substantial weight, it will become extremely difficult for the core CPI month-over-month baseline to return to 0.2%. That would require greater suppression of other components, potentially raising the bar for Fed rate hikes.

Policy implications and market impact
Pressure on the Fed to raise rates will increase further. Watch the November-December data; if the rent and housing services components do not improve, the 2027 rate-hike path may need to be revised sharply higher. On the one hand, as noted above, if rent- and housing services-related components push the core CPI month-over-month baseline back above 0.3%, inflationary pressure will rise, requiring more tightening by the Fed; on the other, the current rise in rents may itself be a negative feedback response to excessively high mortgage costs, which rate hikes cannot effectively curb. This means prices of other consumer goods will have to be brought down further, requiring additional Fed rate hikes.
For markets, the endpoint of the rate-hike cycle will be difficult to determine in the near term, which is unfavorable for all asset classes. The drag from high interest rates will persist, making valuation expansion difficult, while U.S. equities remain highly volatile; an opportunity for a sustained decline in Treasury yields will have to wait, and gold’s safe-haven appeal will also be diminished.