Journal Article
Can Monetary Policy Tame Rent Inflation?
Liu, Zheng; Pepper, Mollie (2023-02-13)
Rent inflation has surged since early 2021. Because the cost of housing is an important component of total U.S. consumer spending, high rent inflation has contributed to elevated levels of overall inflation. Evidence suggests that, as monetary policy tightening cools housing markets, it can also reduce rent inflation, although this tends to adjust relatively slowly. A policy tightening equivalent to a 1 percentage point increase in the federal funds rate could reduce rent inflation as much as 3.2 percentage points over 2½ years.
FRBSF Economic Letter , Volume 2023 , Issue 04 , Pages 6

Journal Article
Will Workers Demand Cost-of-Living Adjustments?
Glick, Reuven; Leduc, Sylvain; Pepper, Mollie (2022-08-08)
Households are currently expecting inflation to run high in the short run but to remain muted over the more distant future. Given this divergence, what role do short-run and long-run household inflation expectations play in determining what workers expect for future wages? Data show that wage inflation is sensitive to movements in household short-run inflation expectations but not to those over longer horizons. This points to an upside risk for inflation, as workers negotiate higher wages that businesses could pass on to consumers by raising prices.
FRBSF Economic Letter , Volume 2022 , Issue 21 , Pages 6