• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Sternlicht says Fed is using an ‘arcane’ tool

Sternlicht denounced rate hikes as "arcane and not appropriate" for the current economy, pointing to the still-robust job market.

However, he also acknowledged the Fed has no other tool to combat inflation.

"I've been through five or six crises,” he said. “This one feels the worst to me,"

While it’s possible the Fed could start introducing cuts to the key rate as soon as June this year, Fed Chair Jerome Powell has emphasized it will all depend on the incoming data.

Stop overpaying for home insurance

Home insurance is an essential expense – one that can often be pricey. You can lower your monthly recurring expenses by finding a more economical alternative for home insurance.

Officialhomeinsurance can help you do just that. Their online marketplace of vetted home insurance providers allows you to quickly shop around for rates from the country’s top insurance companies, and ensure you’re paying the lowest price possible for your home insurance.

Explore better rates

Conflicting rent data

Sternlicht criticized the Fed's method of measuring inflation in the housing market, accusing it of using rent data that’s about a year old and recalling when the central bank responded too slowly to burgeoning inflation back in December 2021, despite surging rent prices.

Although Fed data shows U.S. city rent prices steadily climbing, a December Redfin report revealed the median asking rent fell 2% year-over-year in November — the biggest decline since 2020.

Data from apartment search engine Rent.com also shows rent prices have been trending downward since August 2023, plateauing in the last couple months.

“It’s a huge lag and that angers me to no end,” he said. "I don't know why they don't update the rent data to current data ... Now he's overstating inflation and before he was understating it."

Economists, including Powell himself, are aware of this lag in housing services inflation.

"Housing inflation tends to lag other prices around turning points … because of the slow rate at which the stock of rental leases turns over. The market rate on new leases is a timelier indicator of where overall housing will go over the next year or so," Powell said during a speech at Brookings Institution in 2022.

Still spending like ‘drunken sailors’

Sternlicht believes the federal government continuing to spend heavily is contributing to the inflation problem.

"You have one part of the government with their foot on the brake, the Federal Reserve and Powell, and then you have the other part of the government, the legislature, spending as much money as they can,” Sternlicht said.

“What [Powell] really needs to do is walk across the street and tell Congress to stop spending money like drunken sailors."


Follow These Steps if you Want to Retire Early

Secure your financial future with a tailored plan to maximize investments, navigate taxes, and retire comfortably.

Zoe Financial is an online platform that can match you with a network of vetted fiduciary advisors who are evaluated based on their credentials, education, experience, and pricing. The best part? - there is no fee to find an advisor.

About the Author

Serah Louis

Serah Louis


Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

What to Read Next


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.