If you've been feeling like everything costs more lately, Mark Zandi wants you to know it's not just in your head. The Chief Economist at Moody's Analytics recently called out what he describes as a "serious affordability crisis" gripping the United States, and he's not mincing words about what's causing it.
According to Zandi, the culprits are high tariffs, immigration policy, and deglobalization. He pointed out that groceries, cars, and other everyday necessities have "increased significantly since the pandemic" and that most of these prices "continue to rise at an uncomfortably quick pace."
What Could Have Been: A Tale of Two Forecasts
Zandi shared a chart on X that paints a fascinating what-if scenario. The data compares the current baseline inflation forecast with an alternative forecast assuming typical immigration levels and zero tariffs. The divergence starts in Q1 and it's pretty stark.
Under the current baseline, inflation as measured by the consumer price index sits at 3%. The chart shows it ticking higher in Q1 2026 before gradually declining. But in the alternative scenario with typical immigration and no tariffs? Inflation comes in around 2.4% and actually hits the Federal Reserve's 2% target by early 2026.
"Inflation appears likely to remain stubbornly high for the foreseeable future," Zandi said, and his chart makes that point hard to ignore.
The Wealth Gap in Economic Pain
Here's where things get particularly uncomfortable: while high inflation hurts everyone, it doesn't hurt everyone equally. Zandi has previously noted that wealthy Americans are essentially keeping the economy afloat, and his recent analysis doubles down on that observation.
Upper-class households have enough cushion to absorb price increases. But for low- and middle-income families? It's a different story entirely.
"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.
The immediate survival playbook includes living below your means and aggressively tackling credit card debt. But Zandi's outlook suggests you can't just save your way out of this mess. Getting to the upper class requires picking up side hustles and advancing your career because saving alone won't build the kind of net worth that provides real financial security in this environment.
The Road Not Taken
Perhaps the most frustrating part of Zandi's analysis is his emphasis that none of this was inevitable. The economic outlook could have been dramatically different with different policy choices.
"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."
His chart demonstrates just how quickly economic policies can reshape a country's trajectory. High tariffs, fewer immigrants, and deglobalization weren't unavoidable forces of nature. They were policy choices, and according to Zandi, those choices directly resulted in higher prices across the board for necessities that families can't simply stop buying.
The takeaway? America's affordability crisis has identifiable causes and, theoretically, identifiable solutions. Whether policymakers will change course remains an open question.
