[rory]

> Home prices used to be included in the CPI formula, which is how you get to similar number.

Sorry, I thought you were making the geometric mean argument. Yeah that would definitely add significantly for this year in particular. Home price inflation is about 20%, and is replacing housing inflation at maybe 3% in the CPI calc. Owner occupiers are ~64% of the housing market which contributes around ~33% to CPI. So including that would add (.2 - .03) x .33 x .64 = .036 so 3.6% to CPI.

So around 10%. Comparable to most of the 70s, but not the high-teens emergency points.

And yes the Fed doesn't always accurately predict inflation, but in the long run no one else does either (and one could make billions doing so, it's not like no one's trying).

[Lhiw]

> So around 10%. Comparable to most of the 70s, but not the high-teens emergency points.

Except this is not comparable to most of the 70s at all.

Household leverage and disposable income change how serviceable debt is at different rates.

The numbers I saw puts a 2021 mortgage rate of 3% at an equivalent benchmark rate "in your pocketbook feels" as a 6% rate in pre gfc 2007.

Are you sure 10% doesn't warrant the same emergency as the high-teens of the 70s?