Rents are rising at fastest pace in 40 years. Why it’s bad for inflation, the Fed, and you.

• Consumer inflation was hotter than expected in August.
• Shelter, which includes rents, are about a third of CPI and rose at the fastest rate in 40 years.
• This could help keep inflation elevated, the Fed raising rates and consumers squeezed this year.

Rent is the new gas. Surging rent prices – instead of gas – are hitting consumers hard. 

Consumer inflation rose at an 8.3% pace in the 12 months to August, and increased 6.3% excluding the volatile food and energy sectors, the Bureau of Labor Statistics said on Tuesday. Both topped economists' mean forecasts for 8% and 6%, respectively, and dashed hopes inflation had peaked.  

Medora Lee | USA TODAY