Moody’s Analytics Chief Economist Mark Zandi recently highlighted the “serious affordability crisis” plaguing the U.S., while citing high tariffs, immigration policy, and deglobalization as the key factors.
He then said that the prices of groceries, cars, and other necessities have “increased significantly since the pandemic,” while telling people in an X post that most of those same prices “continue to rise at an uncomfortably quick pace.”
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Current Baseline Forecast Vs. Forecast With Typical Immigration And Zero Tariffs
Zandi posted a chart that showed how inflation would have been different if there were typical immigration and zero tariffs. The chart shows the forecast and current baseline forecast diverging in Q1. It shows the current baseline inflation at 3%, as measured by the consumer price index.
The forecast with typical immigration and no tariffs shows an inflation rate of roughly 2.4% and achieving the Federal Reserve’s inflation target to start 2026. However, the current baseline forecast shows inflation ticking higher in Q1 2026 before gradually dropping.
“Inflation appears likely to remain stubbornly high for the foreseeable future,” Zandi said.
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Upper Class Americans Are The Safest
Zandi previously said that wealthy Americans are keeping the economy alive, and that sentiment returned in his recent X post. While high inflation rates impact everyone, they have an outsized impact on households that aren’t in the upper class.
“The high inflation, combined with a job market struggling to create jobs, rising unemployment, and slowing wage growth, means that the tough financial times low- and middle-income Americans are grappling with will continue on,” he said in the X post.
Living below your means and aggressively paying off any credit card debt are two of the best ways to navigate financial challenges right away. However, picking up a side hustle and advancing in your career are the only paths to the upper class. You can’t exclusively save your way to a high net worth, and Zandi’s outlook suggests financial prudence is more important than ever.
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“It Didn’t Have To Be This Way”
Zandi said that the economic outlook didn’t have to be this way. The forecast suggests inflation could be much closer to the Fed’s target, and he didn’t hesitate to bring up that point in his X post.
“It didn’t have to be this way,” he said. “Inflation was slowing at the start of this year and was on track to return to the Fed’s inflation target by year’s end.”
The chart shows how quickly economic policies can change the outlook of a country. Zandi said that high tariffs, fewer immigrants, and deglobalization were avoidable and resulted in higher prices for various necessities.
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