The Affordability Crisis Isn’t About Inflation
Schrager argues affordability worries stem more from higher energy costs than inflation, as global oil prices pushed U.S. gasoline prices up and squeezed households.
- Rising global oil prices this year have driven up costs at U.S. gasoline pumps, fueling widespread affordability concerns among American households, according to Bloomberg columnist and Manhattan Institute senior fellow Allison Schrager.
- These affordability challenges stem primarily from supply-side constraints in energy, housing, and healthcare rather than excess consumer demand, Schrager argues. Structural solutions are necessary to address these shortages.
- The Federal Reserve's interest rate adjustments cannot resolve supply-based shortages; Schrager contends the U.S. needs more homes, energy, and healthcare, not higher interest rates to fight inflation.
- Aggressive monetary tightening risks significant job losses and firm failures, potentially triggering a serious recession. Policymakers face a trade-off between cooling the economy and undermining household wealth.
- Ultimately, relief depends on Congress, which holds the legislative power to enact structural reforms. Legislators have two years to engineer meaningful improvements before the next election cycle.
37 Articles
37 Articles
Montana Standard
The affordability crisis isn’t about inflation
The big message from the midterms is that Americans are struggling with the cost of living. In case anyone missed it, they need relief now. This will put even more attention on the Federal Reserve: Will Chair Kevin Warsh do…
The Derrick
Hastings TribuneAllison Schrager: The affordability crisis isn’t about inflation
The big message from the midterms is that Americans are struggling with the cost of living. In case anyone missed it, they need relief now. This will put even more attention on the Federal Reserve: Will Chair Kevin Warsh do…
The big message of the midterm elections is that Americans are struggling with the cost of living. In case anyone hasn't figured it out, they need immediate relief. That puts even more focus on the Federal Reserve: Will Kevin Worth do what he can to rein in inflation, or will he bow to pressure from the White House, which wants lower interest rates? Wrong questions. The solutions don't lie at the Fed.
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