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The Daily

Is This Economy as Awful as Voters Think? We Ask Our Expert.

October 21, 2026 • 32m

Summary

⏱️ 7 min read

Overview

In this Daily episode, Chief Economics Correspondent Ben Castleman analyzes the latest economic data before the midterms, revealing a nuanced picture: while business investment and the stock market are strong, Americans face a serious affordability crisis driven by persistent inflation, high interest rates, and stagnant wage growth. President Trump's policies, particularly tariffs and the Iran conflict, have worsened inflation rather than solving it, creating a political liability despite some positive economic indicators.

The Affordability Crisis: Three Key Factors

Castleman breaks down affordability into three interconnected components: inflation, interest rates, and wages. While Trump promised to control inflation after it peaked at 9% in 2022, his tariffs stalled progress at 3%, and the Iran conflict pushed it back up to 3.7%. This triggered the Federal Reserve to raise interest rates again, making borrowing more expensive just as wage growth slowed from 4% to 3%, creating a perfect storm where Americans' purchasing power is actually declining.

  • Inflation hit 9% in 2022, dropped to 3% when Trump took office, but stalled due to tariffs
  • Trump's Iran conflict caused oil prices to spike, pushing gas to $4-4.50 and diesel to record highs
  • Oil price increases filter through the entire economy via transportation costs and energy-intensive sectors
  • Inflation in September reached 3.7%, moving in the wrong direction instead of the promised improvement
" We have the single greatest moment in the history of our country in terms of the economy. "
" What starts as just an energy shock can filter through to everything else in the economy. "

Interest Rates and the Housing Market Nightmare

The Federal Reserve raised interest rates in September for the first time in three years as inflation resurged, pushing mortgage rates to around 7.5% after briefly offering hope they might decline. This has devastating consequences for younger Americans who saved for down payments, believing they'd finally afford homes when rates dropped, only to see that opportunity slam shut in their faces.

  • The Fed raised interest rates for the first time in three years in September 2024
  • Mortgage rates spiked from below 3% during pandemic to 6-7%, then to 7.5% currently
  • Higher rates affect everything from credit cards to car loans to business equipment financing
" They saw this moment of opportunity, and now that has been sort of slammed shut in their face. "
" There's a whole generation of people, I think, who believe that they will never be able to buy homes. "

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