Mark Zandi, chief economist at Moody’s Analytics, warned in a social media post on Sunday that the United States faces a persistent affordability crisis driven by post-pandemic price gains and recent policy shifts. He said consumer price inflation is near 3% as of September 2025 and that higher tariffs and restrictive immigration measures enacted in April 2025 have reversed a prior downward trend. Zandi argued that without those policy changes inflation would have returned closer to the Federal Reserve’s 2% target, and he projected inflation near 3.5% in 2026 under current policies. The warning comes amid official data from the Bureau of Labor Statistics showing an uptick in annual inflation since April 2025.
Key takeaways
- Consumer price inflation stood at 3.0% year-over-year in September 2025, up from 2.3% in April 2025 according to BLS data.
- Inflation peaked at 9% in 2022 before cooling, but Zandi says recent policy moves have stalled that descent toward 2%.
- Moody’s Analytics projects inflation could approach about 3.5% in 2026 under current tariffs and immigration restrictions.
- An alternate Moody’s scenario without the April 2025 global tariffs and with normalized immigration sees inflation near 2.25% through 2026.
- Trump administration officials dispute the claim that tariffs and trade policy have worsened inflation and point to lower energy costs and tariff rollbacks on some grocery items.
- Treasury Secretary Scott Bessent said on NBC’s Meet the Press that imported goods are not driving inflation and forecast stronger, non-inflationary growth in 2026.
- Zandi highlighted risks to low- and middle-income households from sustained high prices alongside a cooling job market and slowing wage growth.
Background
U.S. inflation surged during and after the COVID-19 pandemic, peaking at 9% in 2022 as supply constraints, fiscal stimulus and shifting demand pushed prices higher. From 2023 into early 2025 inflation steadily moderated and was tracking back toward the Federal Reserve’s long-run 2% goal. In April 2025, the administration implemented global tariffs and tightened immigration rules; Moody’s Analytics and other forecasters have modeled those policy changes as upward pressures on prices by constraining supply and labor availability.
Trade policy can affect consumer prices directly through taxes on imports and indirectly by reshaping global supply chains; immigration policy alters labor supply in sectors such as agriculture, construction and services where worker shortages can feed through to consumer costs. Past U.S. episodes of tariff increases and trade disruptions, including historical instances in the 20th century, show mixed effects on overall inflation but clear impacts on specific goods. Those precedents inform current debate over how large and persistent the current policy-driven effects may be.
Main event
On Sunday, Zandi posted commentary and a chart showing two Moody’s Analytics scenarios: one incorporating current U.S. tariff and immigration policies and one counterfactual without those measures. He emphasized that, in his model, the current-policy path keeps inflation stubbornly above the Fed’s target through 2026. Zandi wrote that ‘it didn’t have to be this way,’ stressing that policy choices made since April 2025 changed the previously improving trajectory.
BLS statistics cited in the post show the headline consumer price index up 3.0% in September 2025 versus a year earlier, an acceleration from 2.3% in April 2025. Zandi and Moody’s present this as evidence that tariff- and immigration-related supply constraints are adding to price pressure even as some categories cool. The Moody’s chart projects inflation edging toward 3.5% in 2026 before easing but remaining above 3% for a period.
The Trump administration has responded that prices are under control and pointed to selective tariff rollbacks on grocery staples such as coffee, fruits and beef. In addition, officials highlight lower energy prices and announced trade agreements with major partners as offsetting forces that will reduce costs in coming months. Treasury Secretary Scott Bessent also emphasized tax changes expected under the One Big Beautiful Bill Act as a near-term boost to take-home pay and affordability.
Analysis & implications
If Moody’s central scenario materializes, persistent inflation above 3% would alter the Federal Reserve’s policy calculus and could force a more restrictive stance or slower easing than markets currently expect. Higher-than-expected inflation erodes real incomes, particularly for households that spend a larger share of income on essentials, and complicates monetary policy planning. For low- and middle-income Americans, sustained price pressure combined with slowing wage growth reduces purchasing power and increases financial strain.
Trade barriers such as tariffs raise the landed cost of imports and can prompt producers to source from more expensive suppliers or shift production domestically at higher cost. Restrictive immigration policy can tighten labor markets in specific sectors, pushing wage-sensitive prices upward. Together, these forces can produce broad-based inflationary effects even as headline measures are influenced by energy and housing trends.
Politically, the divergence between prominent economists’ models and administration statements creates a contested narrative ahead of economic policy debates. If inflation remains elevated, voters may judge policymakers on both the design and unintended consequences of trade and immigration actions. Internationally, de-globalization tendencies could reshape supply chains, with implications for trade partners and multinational firms that may pass higher costs to consumers.
Comparison & data
| Measure | Value |
|---|---|
| Peak CPI (2022) | 9.0% |
| CPI YoY (April 2025) | 2.3% |
| CPI YoY (September 2025) | 3.0% |
| Moody’s central 2026 forecast | ~3.5% |
| Moody’s counterfactual (no tariffs/normal immigration) | ~2.25% through 2026 |
The table summarizes headline CPI observations and Moody’s scenario outputs cited by Zandi. The contrast highlights how model assumptions about trade and immigration materially change inflation trajectories. Analysts caution that model projections depend on timing, magnitude and persistence of policy effects as well as external factors such as global energy prices and supply-chain adjustments.
Reactions & quotes
Consumer price inflation is near 3%, well above the Fed’s inflation target, and everything points to even higher inflation dead-ahead.
Mark Zandi, Moody’s Analytics (social media post)
Context: Zandi framed the recent policy moves as a decisive factor reversing an earlier downward trend in inflation and presented modelled scenarios to support that claim.
So inflation hasn’t gone up. And Kristen, the one thing that we’re not going to do is do what the Biden administration did and tell the American people they don’t know how they feel.
Scott Bessent, U.S. Treasury Secretary (Meet the Press)
Context: Bessent disputed the link between tariffs and rising inflation, emphasized services-driven inflation, and highlighted tax and trade measures he says will improve affordability.
Lower energy prices and selective tariff rollbacks should ease pressure on some consumer categories in the months ahead.
White House / Administration statement (official response)
Context: Administration messaging stresses offsetting forces—energy, trade deals, and tax policy—as reasons for optimism about 2026.
Unconfirmed
- The exact contribution of April 2025 tariffs to headline inflation is model-dependent and cannot be measured with full precision in real time.
- The magnitude of inflationary effects from recent immigration restrictions relative to other factors (energy, housing, services) remains uncertain.
- Projections for 2026 hinge on future policy changes, global economic conditions and Federal Reserve actions and therefore carry forecasting risk.
Bottom line
Mark Zandi’s warning underscores that policy choices on trade and immigration can materially shape inflation paths and household affordability. Current data show an uptick in headline CPI since April 2025, and Moody’s scenarios imply a meaningful gap between the path with recent policy changes and a counterfactual without them.
For policymakers, the central challenge is balancing political objectives with macroeconomic effects: tariffs and tighter immigration may achieve non-economic goals but risk elevating consumer prices and straining lower-income households. For households and markets, the immediate takeaway is that affordability pressures may persist into 2026 unless offsetting policy actions or global developments reduce price pressures.
Sources
- Fortune — news report summarizing Zandi’s post and administration responses (media)
- Bureau of Labor Statistics — official CPI data (U.S. government)
- Moody’s Analytics / Mark Zandi — economist commentary and model summaries (think tank/industry research)
- NBC Meet the Press — interview with Treasury Secretary Scott Bessent (broadcast media)