With inflation running above the Federal Reserve's target for 64 consecutive months, Moody's Analytics Chief Economist Mark Zandi says higher consumer prices are not an accident but a direct result of government policy decisions.
By breaking down the underlying economic math, Zandi points to trade tariffs imposed by the Donald Trump administration and restrictive immigration laws as the primary culprits preventing price stability in the current economy.
The Cost of Policy Choices Americans largely view "persistently high inflation and the resulting higher cost of living their number one financial problem." Zandi agrees with this public sentiment, noting that top-line inflation sits at no less than 3.5%, which is well above the Federal Reserve's 2% target.
Through a detailed decomposition of economic tailwinds and headwinds, Zandi emphasizes that the current economic squeeze is deliberately engineered.
"Netting out the inflation tailwinds & headwinds, it’s clear the uncomfortably high inflation is the result of policy choices," he stated.
