Economist Mark Zandi Blames Trump Tariffs, Restrictive Immigration Policies for Higher Cost of Living: 'High Inflation Is a Policy Choice'
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 curre...
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. 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. Most Americans consider persistently high inflation and the resulting higher cost of living their number one financial problem. 5%, well above the Fed’s 2% target. com/poew4Pf76V - Mark Zandi (@Markzandi) July 20, 2026 Read Also: AAPL Stock Hits Historic 11x Sales Peak Ahead of Tim Cook's Final Earnings Call as Apple CEO Tariffs and Immigration Fuel Prices Zandi’s analysis highlights the specific policies driving this surge.
2 points this year. Furthermore, “highly restrictive immigration, a policy choice, is steadily adding to inflation ” by diminishing the available workforce in essential sectors like construction and agriculture. Coupled with the Iran war and energy surges, these factors create significant upward price pressure. 2% last year and “effectively at the Fed’s target” this year.
Underlying Disinflation Forces Despite these pressures, fundamental economic forces are actually working to lower prices. “A soft job market and moderating labor costs, rising vacancy rates and falling rents on new leases, and weak vehicle prices are all leaning against inflation,” Zandi explained. S. Bureau of Labor Statistics reported immediate relief in its June 2026 summary.
4% on a seasonally adjusted basis, representing the largest one-month decline since April 2020. Ultimately, Zandi notes that while these foreign and domestic policies may have other objectives, their immediate costs show up in groceries and electronics. His conclusion is stark and leaves little room for debate: “If the policies end, inflation will recede with them. High inflation is a policy choice.
” How Have Markets Performed In 2026? 53% year-to-date. 14% YTD. The SPDR S&P 500 ETF Trust (NYSE: SPY ) and Invesco QQQ Trust ETF (NASDAQ: QQQ ), which track the S&P 500 and Nasdaq 100, respectively, were higher in premarket on Tuesday.
63. 26 on Tuesday. Read Also: Bill Ackman Says META and AMZN Are 'Cheap Stocks' Despite Their Massive Size Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published editors. Image via Shutterstock