It’s time for the Federal Reserve to cut interest rates, having effectively cooled inflation through aggressive hikes. Persistently high rates are based on a flawed understanding of homeownership costs, which risks unnecessary economic harm. Inflation, measured by the personal consumption expenditures (PCE) deflator, peaked over 7% two years ago and has since fallen below 3%, though still above the Fed’s 2% target. However, the PCE and consumer price index measures of inflation are flawed due to their problematic reliance on estimated rental costs for homeowners.