According to the Zhitong Finance APP, if Trump, who is about to return to the White House, wants to push U.S. inflation down to a more tolerable level, he will need help with housing costs, while federal policymakers have limited influence in this area.
Data released by the U.S. Bureau of Labor Statistics on Wednesday showed that the U.S. November CPI rose 2.7% year-on-year, in line with market expectations and slightly higher than October's 2.6%; it rose 0.3% month-on-month, also meeting market expectations. Excluding the volatile food and energy prices, the November core CPI rose 3.3% year-on-year and 0.3% month-on-month, both unchanged from October and also in line with market expectations.
The data indicated that housing prices were the main driver of the month-on-month increase in the November CPI, contributing nearly 40% to the rise. Additionally, food prices rose 0.4% month-on-month; energy prices increased 0.2%, ending the flat state of October.
It is noteworthy that some sub-items of the core CPI continue to show stable growth. Among them, medical services prices rose 0.3% month-on-month, used car and truck prices increased by 2.0%, and household goods prices rose 0.6%. However, communication prices fell for the third consecutive month, decreasing by 1.0% month-on-month in November.
It remains unclear whether overall U.S. inflation will sustainably and convincingly return to the Federal Reserve's 2% target, at least not before housing inflation further eases. Lisa Sturtevant, chief economist at Bright MLS, stated, &#34;It is expected that over time, we will begin to see rent growth slow year-on-year. It just feels like it will take a long time.&#34;
In fact, since peaking in March 2023, housing inflation has been slowly and unevenly declining. The housing issue is caused by a persistent supply-demand imbalance that began in the early days of the pandemic and has yet to be resolved. According to Realtor.com, the housing supply in November was about 17% lower than five years ago.
Rent has been a particular focus for policymakers, with mixed news regarding rents. Data from real estate market site Zillow shows that the national average rent in October was $2,009 per month, slightly down from September, but still 3.3% higher than the same period last year; over the past four years, national rents have risen by about 30%.
In the real estate sector, costs continue to rise. Although the Federal Reserve has cut the federal funds rate by 75 basis points since September and is expected to cut another 25 basis points next week, the increase in 30-year mortgage rates has actually matched the extent of the Fed's rate cuts during the same period.
All these converging factors pose a potential threat to Trump. Some economists expect that Trump's policies, such as tax cuts and tariffs, will exacerbate the inflation dilemma. Lisa Sturtevant stated, &#34;Some of the measures proposed by Trump will lead to inflation, so I think the prospect of inflation continuing to fall back to 2% is less certain than it was six months ago.&#34;
On a more optimistic note, Trump has made deregulation a cornerstone of his economic agenda during the campaign, which could impact the real estate market by opening federal land for construction and generally lowering the barriers for home builders. Trump has also strongly supported lowering interest rates, although monetary policy is essentially outside his purview
Wall Street is generally optimistic about the outlook for the real estate market. Bank of America economist Stephen Juneau stated in a report, &#34;Rents may eventually normalize to levels consistent with a 2% inflation rate.&#34; Krushna Guha, head of central bank strategy and economist at Evercore ISI, noted that the housing data for November &#34;will be seen by the Federal Reserve as encouraging news.&#34;
However, Trump may face a potential dilemma that makes alleviating housing affordability difficult. Lisa Sturtevant stated, &#34;We cannot lower interest rates until housing costs come down. But housing costs will not come down until interest rates are lowered.&#34;

If Trump wants to reduce U.S. inflation to an acceptable level, he needs to pay attention to housing costs, but federal policymakers have limited influence over this. In November, the CPI rose 2.7% year-on-year, with housing prices being a major driver, contributing nearly 40% of the increase. The core CPI rose 3.3% year-on-year, with prices for medical services, used cars, and household goods increasing, while communication prices continued to decline. The imbalance between housing supply and demand remains unresolved, and rent growth is expected to slow down, but it will take time

- The article discusses the challenges facing Trump in reducing U.S. inflation, particularly regarding housing costs, which significantly impact the Consumer Price Index (CPI).  
- November's CPI rose by 2.7% year-on-year, with housing prices contributing nearly 40% to the increase, while rent and mortgage costs remain high despite recent Federal Reserve rate cuts.  
- Experts suggest that without addressing housing supply issues, inflation may not return to the Fed's 2% target, creating a dilemma where lower interest rates cannot occur until housing costs decrease.

Difficult! Trump wants to reduce inflation, but housing costs may not agree