HOUSING!
“Owners Equivalent Rent” is the basis used in inflation metrics for the cost of your housing.
Since the value of houses has been collapsing, the biggest thing you spend money on, housing, has been rapidly declining within the basket of goods the Fed considers.
Therefore, inflation everywhere else can (possibly) be hidden by the rapidly declining value / cost of houses.
Now, did you really experience a reduction in cash outflow because your house declined in value? No?
So, is the Fed really just using a housing bust that killed your Net Worth as a cover for actual inflation everywhere else in the economy?
Quite possibly.
Who will go do the analysis of “Inflation, excluding Housing”?
Not entirely sure how the collapse in the price of my house has changed how much I pay for hamburger. I still buy the same amount (and the price I pay for it has actually slipped a bit).