The desired rate of inflation is 2%, and the latest rise of 3.1% consumer price index in January is not yet comfortable. One big source of stubbornness to further calmness is that housing shelter inflation is rising at 6%. That's a bit of a mystery since apartment rents are no longer rising and single-family rent growth is at low single-digits. Home price is considered as an asset (like a stock price) and is not part of the inflation measurement.

The Federal Reserve will not cut the interest rate in the first half of this year in my view. But rate cuts of 3, 4, or even 5 rounds will be possible in the second half of the year as rent measures will be much more well-behaved. Mortgage rates will be bouncy week-to-week but will most likely settle towards 6% by the year end.

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