Is the migrant influx boosting inflation?

There's the risk that increased immigration and continued labor market tightness could lead to persistently high core services inflation. OK, so we'll translate that. That was a Fed official essentially warning that as this migrant crisis continues in this country, it's serving to only push prices even higher as we are already in an inflation crisis. The White House, though, has praised the president for bringing prices down. I'll be at just in the last couple years from the high prices under his watch. Robert Wolf is former economic advisor President Obama. Dan Greenhouse's strategist for Solas Alternative asset Management. Thanks to both of you for being here. So, Dan, I mean, for us, that was the first time we heard, especially from a Fed official, the time of the migrant crisis to inflation getting worse. What did you think when you heard it? Yeah. So what what the point that that she's making is when you think about what immigrants might normally do, they, they come into the country both legal and illegal. They buy goods, they buy services, that's normal. They go into the labor market, they boost or lower wages, that's normal. But in the, in the current case, the CBO expected somewhere around 1,000,000 immigrants into the country in 2023. The actual number was more than 3,000,000. So three to four times more immigrants came into the country at a time when we had a very low supply of housing. And the point that she's making is in that type of environment, it wouldn't be surprising to see these immigrants push up housing inflation, which feeds into the types of measures that the Fed cares. And perhaps that's already happening. I mean, Robert, I'll get your take on this. These are housing costs under this presidency from June 2021 to March 2024. Home prices up 34%, rent prices up 21%, mortgage is up 152%. That's great for the haves. If you're already in a house, you're seeing the the value of it go way up. But for the have nots, it's tough out there. Yeah, no, it's very tough. I mean, we've been clear for the last few years since COVID that with the supply of housing way down starting during COVID and then the logistics issues we've had as well as inflation bringing rates up. So all of a sudden mobility of those who want to move, you know, aren't going to, you know, but to this idea that more and more migrants coming into the country, the more we see this happening and not getting control of this situation that that official saying that is making inflation worse. Yeah. No, I was read, I read her speech. And so I was going to finish on housing because housing is a supply demand situation that started during COVID with the lack of supply, you know, that we got it economics background. And all of a sudden with higher rates, we know that people aren't, you know, selling their homes because of mobility. What she was also saying she was going both ways. She was saying that if we reduce immigration, the labor market will tighten and it will impact rate wages. She was also saying the other side, the impact on housing. I actually agree with the Fed governor on one or on her main point to her speech that the Fed should not look to lower rates. They should keep their tools in their toolbox. I'm not necessarily where she is on hiking rates, but I actually definitely agree that the the Fed's view of lowering rates is. It seems you're getting away from the, the the topic here, and that is that we have an unprecedented record number of migrants coming into this country under his watch. And as this is happening, prices are going up. Most economists say that's because of massive government spending. But at the same time, this is going to make things worse. This is Mitch McConnell weighing in. Listen, if Joe Biden is defeated this fall, I think the principal reason that will occur is 2 unforced errors, 1, the $2.6 trillion creating the inflation and the other basically opening the border. And these worlds, Dan, have been colliding for quite some time now. Yeah. So we're talking about housing costs. But at the same time, the the surge in immigration, in immigration to the United States, again, originally expected to be call it a million, actually 3 to 4 million ends up boosting government spending because a lot of the, of the immigrants that come to the country need financial support in the form of phones or food stamps or whatever sort of government assistance is put into place. And in an environment in which we're already spending a ton of money, it lends even more money throughout the economy, which can can make the the inflation situation and I would probably argue has made the inflation situation a bit worse. I mean, remember when they were talking about three rate cuts this year, Robert, Robert, that was broadcast by the Federal Reserve chair before the turn of the year. Now it looks like there's not even be any cuts at all. Real quick, final thought to you, I was never supportive of the rate cuts. You and I were always saying long tail inflation is here. I would just say that President Trump's 100%, former President Trump's 100% tariff would be the worst thing ever for inflation that our economy's ever seen. And most Republican economists agree with that. Well, so far, there hasn't been a lot working to keep those prices from going higher under the current administration. We're dealing with that for the time being, but this will surely be a big debate on that stage tomorrow. So thank you very much to both of you for setting it up.