Mark Zandi: Tariffs and Immigration Cuts 'Juicing' Inflation and Fueling an Affordability Crisis

Mark Zandi of Moody's warns tariffs and immigration cuts are 'juicing' inflation, deepening an affordability crisis for US households and hurting budgets.

Moody's chief economist Mark Zandi is raising the alarm: tariffs and immigration cuts are 'juicing' inflation, and the result is a serious affordability crisis for US households. His warning highlights how policy choices are reverberating through consumer prices, wages, and everyday budgets.

Zandi's point centers on two powerful drivers. Tariffs increase the cost of imported goods and disrupt supply chains, pushing up consumer prices. Simultaneously, tighter immigration policies reduce labor supply in key sectors such as agriculture, construction, and services, creating labor shortages that can raise wages and prices. Together, these forces amplify inflationary pressure rather than tame it.

For many American households, the consequences are tangible. Higher grocery and energy bills, more expensive housing and construction costs, and rising service prices mean families must stretch paychecks farther. Even modest inflation spikes hit lower- and middle-income households hardest because they spend a larger share of income on essentials. That dynamic is what Zandi describes as an affordability crisis: incomes don’t keep pace with the rising cost of living.

The impact shows up across the economy. Small businesses face higher input costs from tariffs and struggle to find workers as immigration falls, sometimes passing costs to consumers. Supply chain disruptions can make goods scarcer and pricier, while higher labor costs in some industries translate into steeper service bills. Together these trends reduce purchasing power and slow real wage gains.

What can policymakers do? Zandi’s analysis implies a need to rethink protectionist trade policy and evaluate immigration rules through an economic lens. Reducing unnecessary tariffs, improving trade logistics, and crafting targeted immigration policies that fill labor gaps would ease supply constraints and help curb price pressures. In parallel, measures to support households — from targeted tax relief to childcare and housing assistance — can blunt the immediate affordability squeeze.

As the debate over trade and immigration continues, Zandi’s warning is a clear reminder: economic policy choices have direct effects on inflation and household wellbeing. Addressing the roots of 'juiced' inflation will require coordinated action across trade, labor, and fiscal policy to restore affordability for American families.

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