Economist Warns U.S. Affordability Crisis to Persist Amid Trade and Immigration Policies

Moody's Analytics Chief Economist Mark Zandi has expressed concern over the United States' ongoing affordability crisis, attributing it to recent trade and immigration policies. In a social media post on Sunday, Zandi highlighted that consumer price inflation is nearing 3%, surpassing the Federal Reserve's target, and indicated that further increases are likely.

Zandi pointed to the implementation of global tariffs in April and restrictive immigration policies as key factors disrupting supply chains and labor markets, leading to persistent inflation. He noted that prior to these measures, inflation was on a downward trajectory toward the Federal Reserve's 2% target.

The Bureau of Labor Statistics reported a 3% year-over-year increase in the consumer price index for September, up from 2.3% in April. Zandi projected that inflation could rise to nearly 3.5% next year before slightly decreasing but remaining above 3%. He warned that the combination of high inflation, a struggling job market, rising unemployment, and slowing wage growth would prolong financial difficulties for low- and middle-income Americans.

In contrast, Treasury Secretary Scott Bessent stated in an interview on NBC's 'Meet the Press' that inflation has not increased since April, attributing current inflationary pressures to the services sector rather than imported goods. Bessent also mentioned that lower energy prices and upcoming trade deals are expected to alleviate some price pressures in the near future.