Mark Zandi: Tariffs and Immigration Cuts Are 'Juicing' Inflation and Harming US Affordability

Moody's Mark Zandi warns tariffs and immigration cuts are 'juicing' inflation, fueling an affordability crisis for US households and straining budgets today.

Mark Zandi of Moody's warns that recent policy shifts are 'juicing' inflation and driving a serious affordability crisis for US households. As consumers confront rising grocery, housing, and energy bills, the chief economist’s blunt assessment highlights how tariffs and immigration cuts are amplifying price pressures across the economy.

Tariffs raise the cost of imported goods and inputs, which businesses often pass on to consumers. Higher import costs ripple through supply chains, lifting prices for everything from electronics to everyday household items. At the same time, reduced immigration tightens the labor market, shrinking the available workforce in sectors that depend on immigrant labor. That combination puts upward pressure on wages in some industries and on prices more broadly — a dynamic that can push inflation above what monetary policy alone can easily control.

The consequence is a widening affordability crisis. For many US households, paychecks are not keeping pace with the rising cost of living. Essentials like food, housing, transportation, and healthcare account for a larger share of family budgets, squeezing discretionary spending and increasing financial stress. Zandi’s warning underscores how policy choices outside of monetary policy — notably trade and immigration decisions — can have direct, tangible effects on household finances.

Policymakers face a delicate balancing act. Easing tariffs and reassessing immigration limits could help relieve supply-side constraints and dampen inflationary impulses. At the same time, targeted fiscal support for low- and middle-income families and investments in domestic production and supply chain resilience can reduce the immediate burden on households. The Federal Reserve also contends with the challenge of distinguishing between temporary price spikes and persistent inflation driven by structural factors.

Zandi’s analysis serves as a reminder that addressing the cost-of-living crisis requires coordinated policy responses. Tackling tariffs and immigration cuts — alongside supply-side reforms and targeted relief — can help restore stability to prices and improve affordability for US households. As inflation remains a central concern, understanding the role of trade and labor policy is essential to shaping solutions that protect family budgets and promote long-term economic health.

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