How Used-Car Prices Are Warping Inflation Data in 2026

New and used car prices are diverging in a way that economists haven't seen in decades, and it's wreaking havoc on how the Bureau of Labor Statistics calculates core inflation. In this episode, Lucas and Luna drill into the specific methodology of the Consumer Price Index's 'owners' equivalent rent' and 'used cars and trucks' component, and explain why a 4.2 percent drop in wholesale used-car prices at Manheim auctions this June hasn't shown up in the official CPI. They walk through the BLS's 'hedonic quality adjustment' process, the lag between auction data and index publication, and what this means for the Federal Reserve's July rate decision. With the trade-weighted dollar at 120.5 and import prices from China hitting their highest since 2008, the usual channels of disinflation are blocked — but used cars might be the one sector where price relief is real, if you know where to look. Lucas also brings a specific example: a 2021 Toyota Camry that lost $1,400 in wholesale value between May and June 2026, yet the CPI still shows used-car prices up 1.1 percent over that same period. #UsedCars #CPI #Inflation #FederalReserve #ManheimAuctions #HedonicAdjustment #CoreInflation #ConsumerPriceIndex #OwnersEquivalentRent #ImportPrices #ChinaTrade #TradeWeightedDollar #CoxAutomotive #BureauOfLaborStatistics #MonetaryPolicy #Economics #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo