That should be a red flag for policymakers as monetary decisions are focused on actual outcomes, not forecasted. But reported inflation statistics do not show the 1970s inflation-style inflation because they no longer include actual house prices.

The old consumer price index included house prices in measuring the owner's housing cost, whereas the present-day price index base owners' housing cost on an arbitrary, non-market rent measure. The only way to make a price series strictly comparable over time is to use the same measurement process.

In April, the median price for existing homes increased 20.3% in the past twelve months, a new record and far above the 1970s high-reading of 17.4%. More importantly, the increase in existing house prices is ten times greater than the 2% increase in non-market rents in the consumer price index.

Owners rent index accounts for nearly one-quarter of the overall consumer price index and a full one-third of the widely followed core index. Inserting actual house prices in place of the non-market rents would add roughly five percentage points to 4.2% headline and 3% core inflation readings. The last time the US consumer price inflation ran that high was during the 1978 to 1982 time frame.