Inflation is cooling. But stubbornly high housing costs could spark a flare-up and a rate hike by year-end, chief economist warns.

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• The Fed's preferred inflation gauge cooled in April, but prices could heat back up this year.
• High housing costs will prevent inflation from coming down, says Stifel's chief economist.
• A rate hike could be in the cards by the end of the year, she predicted.

The Federal Reserve's favorite inflation measure, the personal consumption expenditures index, cooled in April, but there's a corner of the economy that may still be a problem for the central bank.