Rising Rents Challenge Inflation Data The Federal Reserve is facing a housing mystery as overall inflation declines, yet housing costs remain high. The 6% increase in shelter costs in January has contributed to the rise in consumer prices. This poses a dilemma for the Fed as it aims to reach its 2% inflation target. While private sector data shows rents stabilizing or decreasing, official data has yet to reflect this change. The divergence between the two sets of data has led to uncertainty and caution among economists and policymakers. The delay in the government's data capturing rental price changes, compounded by the disruption caused by the pandemic, makes it challenging to predict when and by how much inflation will ease. This uncertainty could influence the Fed's decision on interest rates.