by The Chandan Economics Research Team <— Click Here for complete article with charts and research.
Real Impact by Chandan Economics explores how cornerstone data releases influence interest rate forecasts and reshape the rental housing sector’s outlook.
Last Updated: March 11, 2026
What Happened: The US Consumer Price Index (CPI) edged higher by 0.3 percentage points in February, compared to 0.2% in January, according to the latest data from the Bureau of Labor Statistics (BLS).
Annual inflation held steady at 2.4%, in line with expectations. Measuring the annual change in CPI components, energy prices rebounded (+0.5%) after edging down in January (-0.1%). However, last month’s price activity does not reflect the effects of the recent US-Israel War with Iran.
Food prices were steady (+3.1%) on an annual basis but rose 0.4% month-over-month in February, up from 0.2% in the previous month. Core-CPI inflation rose just 0.2% month-over-month, down from 0.3% in January, and is up 2.5% year-over-year. Core figures also matched expectations.
What It Means for Interest Rates: Absent some sort of emergency policy adjustment in reaction to the ongoing conflict in the Middle East, Wednesday’s CPI report all but guarantees that there will be no change in rate policy at the FOMC’s upcoming March meeting.
Core-inflation remains above the Fed’s 2% target, and this is likely to give more ammo to the committee’s more hawkish members. Heading into today’s report, futures markets priced in just a 1.7% chance of a rate change at the March meeting, with most remaining probabilities for a March rate cut collapsing after the CPI release.
Forecasts for the year-end 2026 Federal Funds rate shifted a bit after the CPI release. One day prior to the data, futures markets priced in an 85.1% chance of at least one rate cut by the end of the year and a 51.1% chance of at least two cuts.
Following the report, the probability of at least one rate cut by the end of the year fell to 77.5% while the chances of two or more cuts fell to 38.8%.
What It Means for Rental Housing: Overall, the inflation outlook has gradually improved in recent months. Although some components remain volatile on a month-to-month basis, services inflation, particularly shelter, has shown an undercurrent of easing as of late.
Still, the ongoing war in the Middle East risks adding upward price pressure to non-core components, which could spill over into core items if such a shock were to sustain for an extended period.
In the immediate term, rental housing operators should keep an eye on movements in the U.S. Treasury market. A recent intra-day spike in the 10-year T-bill sent yields to their highest level in a month amid sustained Middle East tensions.
Even as the FOMC maintains its neutral policy posture, rising Treasury yields could signal a net-tightening of credit conditions as markets absorb a potential energy shock.
Meanwhile, the apartment supply glut of recent years has largely leveled off. As the market digests this new inventory and higher-for-longer rates push supply pipelines lower, fundamentals for existing inventory should improve.
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