Bloomberg Surveillance · Wednesday, September 9, 2026
Jay Hatfield argues that there is no current inflation problem, citing a real inflation rate of 1.3% and a decline in year-over-year CPI from 2.9% to 2.4%. He criticizes the shelter component in CPI for using delayed and market-rent data, and points to falling real-time rents. Hatfield believes a Fed rate hike would be 'incredibly stupid' as inflation is clearly declining, and suggests a rate cut is possible if oil prices decrease, which would then bleed through to core inflation.
“It's 1.3%. Really? So if you take real prices, again, CPI is vastly superior. And Morris was starting to say that, but he wants to appease the rest of the FOMC. So we kind of backtrack on that. But we would not cut rates right now because oil prices do bleed through the core.”
“So for most obviously airline fares, that's about 0.2 CPI right now. But the shelter component continues to be misstated. We publish our own index that is at 1.3%. And we use this thing called the internet. You could also use the Bloomberg terminal and get real-time prices for rents. And they are negative year over year, whereas the CPI is assuming they're about 3%. So they use deeply delayed data, six months on purpose and longer because they use renewing rents instead of market rents. So we do not have an inflation problem.”
“We do have a political problem because the FOMC wants to demonstrate their independence. So they possibly could raise rates, but that would be incredibly stupid because they would be raising rates when anybody can see it's declining. Inflation is declining 2.9 to 2.4. So it would make them look political. So they'd be more at risk of losing their independence.”
“Only potentially a cut if we do get lower oil prices.”