Why not give them (and everyone) a viable non tradable sector option, to otherwise naturally occurring internal inflation? By making room for greater productivity in non tradable sector activity, the productive potential of tradable sectors could remain strong as well - wherever tradable sector activity happens to take place. Plus, the Fed's "let's just cut off everyone" response to today's non tradable sector inflation, helps no one, regardless of whether non tradable sector activity "eats" everything in its path. How might production reform be considered, given the problems of a mature general equilibrium?
First, any time governments and central bankers attempt to reduce price inflation arbitrarily, they end up reducing marketplace capacity and the ability to participate in the economy, at the same time. This has already occurred to some degree, in both healthcare and housing. The main difference between governments and central bankers - given policy makers' propensity for price ceilings, price floors and monetary tightening - is that monetary authorities in this instance are creating losses in marketplace capacity too slowly for everyone to notice (thus far). That said, people are beginning to notice the lack of economic participation, because of the decline of so many places that were once full of economic vitality.
The best response to present day sectoral imbalance is a free market response. And - as many readers know - I believe a marketplace for time value to be a useful long term approach. A new group centered time continuum for time based product, could occur in settings where first mover (innovative) activity need not threaten already existing patterns. When potential innovations are suggested that are useful, but no alternative equilibrium exists to accommodate them, perhaps one can be created. Eventually, this approach could translate into greater domestic vitality. Flexible forms of property ownership, would further augment the process.
Otherwise, today's relatively fixed positions of real estate and time use (in general equilibrium), will only continue to limit growth capacity for nations as a whole. It's a problem which is further exacerbated, when nations respond by trying to regain the very tradable sector activity which is nonetheless being crowded out at an international level, by today's non tradable sector patterns. Meanwhile, central bankers have responded by reducing everyone's marketplace capacity and participation.
Just the same, economic balance between tradable and non tradable activity can be difficult, when much of the latter takes place through imposed - rather than free market - conditions. There's also a natural resource aggregating component to this problem. The same competitive cost strategies which contribute to tradable sector competition at an international level (competing with everyone), often present problems for non tradable sector activity (competing locally), in local forms of general equilibrium.
Higher (relative) pricing strategies not only make it easier for non tradable sectors to establish dominance, they result in greater monetary resources for local organizational capacity. However, many of the non tradable sector pricing mechanisms which contribute to regional vitality through internal inflation, manifest elsewhere in the form of problems for economic access, along with higher levels of both public and private debt than would otherwise be necessary, for nations, businesses and citizens alike. The lack of (customer driven) non tradable sector innovation, has resulted in healthcare, education and housing inflation which has finally reached a point capable of threatening international economic stability.
Whereas an alternative equilibrium that generates internal good deflation for local production and consumption, is capable of creating positive externalities which multiply over time. Further, those who would reduce both producer and consumer costs through innovation, would not create the first mover issues which otherwise disrupt local organizational patterns in general equilibrium. When small alternative equilibrium settings mature quickly, as of course they sometimes will (with their own unique marketplace rigidities), create new small alternative equilibrium settings. The object is to reach for more productive economic complexity, wherever it is possible to do so, instead of forcing people, arbitrary pricing and the most important forms of knowledge use into already productive spaces.
If the Fed doesn't like inflation, and of course it doesn't, an alternative equilibrium option is one way to ultimately restore growth for economic activity in all sectors. Even though alternative equilibrium would generate a closely coordinated - hence internal - marketplace for time value, this is aggregate growth which can be replicated by further decentralization, for vital knowledge use and time based services creation. Nevertheless, these are organizational patterns which hold potential to create good deflation for non tradable sector activity. Good deflation in non tradable sector activity, could finally convince today's central bankers to let go of their losing game of gradual monetary tightening, in the hopes no one is really paying close attention.