Shelter inflation reads 4.8% in the April 2026 CPI. New-lease asking rents in major markets have been flat to slightly negative for 18 months. Both numbers are correct because the BLS measure is an average of all existing leases, not just new ones, so it lags reality by 12 to 18 months in either direction.
Apartment List, CoStar, and Zillow’s new-lease indices all show year-over-year growth at zero or negative as of early 2026. When that reality catches up to the BLS measure, shelter’s contribution to CPI will mechanically fall over the next 12 months and core CPI will drop from 3.1% toward 2.0-2.5% without the Fed doing anything additional.
That leaves 0 to 0.5 points of stickiness. The answer depends on services ex-shelter, which tracks wage growth. Wages are running 3.8%, close enough to 2% inflation to be comfortable. The Fed will cut once more before year-end, probably September.