Inflation in US

The US FED decided to keep the interest rates low for an extended period due to subdued inflation trends.
The core inflation rate in the US has fallen from 2.5% in mid 2008 to around 1.8% currently.
However this may be misleading.
In the computation of core inflation number a weigtage of 40% is for rent for owners. This basically refers to cost of home ownership by what someone would have to pay in order to rent the house one owns.
In the past two years due to falling house prices and increased vacancy the rental rates have got pushed down. This has in turn brought down the core inflation.

Excluding housing and rent the core inflation has actually increased from 1.8% in mid 2008 to 2.8% currently.

The US FED would be forced to increase the interest rates by Jul-Sep this year since trend would ease out in the coming months.

In India, in contrast the inflation number does not include any housing impact (other than raw materials used for construction). If we bring in the housing impact into the inflation number the number would surely be much higher that what is currently being reported.