Are we in a new era of permanently higher prices?

Summary

The Indicator from Planet Money

Episode Summary: "Are we in a new era of permanently higher prices?"

Air Date: June 18, 2026
Host(s): Darian Woods, Waylon Wong
Guest: Mark Blyth, Political Economist at Brown University

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Episode Overview

This episode explores whether the United States, and by extension the global economy, is settling into a new era of persistently higher inflation. Hosts Darian Woods and Waylon Wong are joined by Mark Blyth, political economist and co-author of Inflation: A Guide for Users and Losers. Together, they break down the forces driving inflation, discuss who benefits and who loses in this new landscape, and offer real-world examples and data to reveal the uneven impact of inflation across different groups.

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Key Discussion Points & Insights

1. The Current Inflation Landscape

(00:06–01:05)

• Federal Reserve Policy: The Fed is holding interest rates steady despite inflation at 4.2%, which many experts see as high and persistent.
• New Leadership: Fed Chair Kevin Warsh sets up task forces to deliver "price stability," acknowledging the Fed's failure to keep inflation within its 2% target for over five years.

Quote (Mark Blyth, 00:45):
"Inflation has been running well ahead of the Fed's long stated inflation goal of 2%. That's been going on for more than five years."

2. Are We Entering a New Era of High Inflation?

(03:15–04:24)

• Structural Shifts: Mark Blyth argues for the "higher for longer, if not permanently" camp. The low-inflation era of the past 30 years was unusual, fueled by the entry of China and Eastern Europe into the global workforce, cheap goods, globalization, and presidents refraining from pressuring the Fed.
• Reversal of Trends: Globalization is reversing, climate change is creating supply shocks, and the old economic norms are fading.

Quote (Mark Blyth, 04:01):
"All of those things [globalization drivers] are either going into reverse or coming to an end… add climate change into this as a series of supply shocks that are probably going to get more prominent, and you have all the ingredients you need for sustained higher inflation rates."

3. Winners and Losers of Inflation

(04:24–09:05)

Who Benefits?

• High-Income Individuals: Those who can adjust their spending easily, e.g., "Whole Foods shoppers," are less affected.

  Quote (Mark Blyth, 04:33):
  "If you shop at Whole Foods, you're impervious to inflation because you've been paying 30% more for your groceries than you ever should have."

• Fixed-Rate Borrowers: Having a mortgage at a low, fixed rate is a major advantage, as inflation erodes the real value of outstanding debt.

  Quote (Mark Blyth, 05:36):
  "That's why all the boomers have huge houses."

• Stock Market Investors: Many companies (especially oil firms) can raise prices during inflationary periods, boosting share prices.

  Quote (Mark Blyth, 05:59):
  "Oil companies made a tremendous windfall over the past couple of years..."

• Corporations & Banks: Businesses with pricing power or those operating in inelastic markets (where demand doesn't drop despite higher prices) can profit, as can banks that increase lending rates more than savings rates.

  Quote (Mark Blyth, 08:11):
  "When interest rates went up, the banks basically are able to charge more. They have a higher interest rate, but they didn't pass that through the savers. Right. So you're still getting like the square root of nothing in your savings account. And now they're charging 6%, 7% on their mortgages."

Who Loses?

• Low-Income Shoppers: Those who shop at discount chains (e.g., Dollar General) are more affected since a 5% price increase can be devastating.

• Bottom 80%–40%: Mark Blyth points out the disproportionate impact on the bottom 80% of earners, particularly the lowest 40%, who lack flexibility and income-raising options.

  Quote (Mark Blyth, 09:05):
  "The bottom 80% of the income distribution. And really the bottom 40% are the ones that really, really suffer this because they don't have much in the way that they can augment their incomes."

4. Debating Corporate Greed and Market Power

(06:18–07:44)

• Corporate Pricing Power: Companies claim they can "push on through prices" during inflation, pleasing investors.

• Greedflation: The controversial theory that corporate greed drives inflation. Mark argues that while companies can't start inflation, they will seize opportunities to raise prices if markets are concentrated enough.

  Quote (Mark Blyth, 07:09):
  "...when you get concentrated markets, when you have inflationary shocks, why wouldn't a firm try and take advantage of that?"

• Counterpoint: Sometimes, monopolies hold prices to protect long-term profits, while smaller competitors must raise prices to survive.

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Notable Quotes & Memorable Moments

• On adjusting grocery spending:

  Waylon Wong (10:05):
  "My local Albertsons chain has an app where you can look up prices. So before I go grocery shopping, I look up the price for every single item on my list and I note down the unit cost. And then I take my app to Aldi and for every item, I look up the price... And now grocery shopping takes me five hours. But I’m saving at least some dollars."

• On the illusion of equal suffering:

  Mark Blyth (04:33):
  "The story we like to tell each other that we all suffer from inflation simply isn't true because it varies across the income distribution."

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Timestamps for Key Segments

• 00:06–01:05 — Setting the stage: Fed policy and inflation status
• 03:15–04:24 — Why high inflation might be the new normal
• 04:24–06:18 — Winners: High-income groups, fixed-rate borrowers, corporations
• 06:18–07:44 — Corporate strategies during inflation, "greedflation" debate
• 08:11–09:28 — How banks profit in the new environment
• 09:05–09:28 — The disproportionate burden on the bottom 40%–80%
• 09:33–10:16 — Real-life inflation-fighting tactics (Waylon’s grocery strategy)

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Tone & Language

The episode maintains The Indicator's signature blend of clarity and wit, with conversational banter ("Embarrassing, but I have to say, for an American, I'm just like what's all this...") and relatable examples (Whole Foods vs. Aldi shoppers) alongside deep economic analysis.

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Summary Takeaway

The podcast paints a sobering but nuanced picture of a world where inflation may remain high for years to come. While some—homeowners with fixed mortgages, stock market investors, and profit-holding corporations—stand to benefit or at least weather the challenge, the brunt falls on the lower-income brackets with fewer options. The takeaway: inflation isn’t a one-size-fits-all phenomenon, and in this new era, knowing your financial position and having flexible choices is more crucial than ever.

Transcript

[Announcer]

Npr.

[Darian Woods]

Yesterday, the Federal Reserve announced that it was keeping interest rates on hold. The central bank wasn't taking any strong action this time round to combat rising prices, even though inflation is high at 4.2%. All of this makes persistent inflation more likely.

[Waylon Wong]

The new Fed chair, Kevin Warsh, claims he's going to shake things up. He set up several task forces to help him do that. But here he is at yesterday yesterday's press conference on his most immediate focus.

[Mark Blyth]

This committee will deliver price stability.

[Waylon Wong]

Kevin Warsh said that the Fed he came into hadn't achieved that.

[Darian Woods]

We recognize that inflation has been running

[Mark Blyth]

well ahead of the Fed's long stated inflation goal of 2%. That's been going on for more than five years.

[Darian Woods]

And given that the Fed didn't raise interest rates yesterday, could we be bracing ourselves for another inflationary wave? This is the indicator from Planet Money. Hi, I'm Darian Woods.

[Waylon Wong]

And I'm Waylon Wong. Today on the show Inflation Winners and Losers, we ask whether we could be entering a new world of high inflation. And we talk about who's going to benefit and who's going to hurt.

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[Darian Woods]

Edu Mark Blyth is a political economist at Brown University. He's the co author of Inflation A Guide for Users and Losers. And being from Scotland originally, Mark had some comments to make about my name.

[Mark Blyth]

The Darien project is what bankrupted Scotland and led to the act of Union.

[Darian Woods]

However, you know, it's spelt slightly differently, but yes, it's spelt slightly differently.

[Waylon Wong]

Embarrassing, but I have to say, for an American, I'm just like what's all this? I do not have that kind of association with your name.

[Darian Woods]

So the Darien scheme was a Scottish attempt to colonize modern day Panama, abandoned fairly quickly in 1700. But anyway, the economic shocks that we wanted to talk about were closer to the present day.

[Waylon Wong]

Yes. We wanted to know whether high inflation could be the new normal.

[Mark Blyth]

I firmly fall into the we're any higher for longer, if not permanently camp.

[Waylon Wong]

Permanently camp. No, thanks.

[Darian Woods]

Yeah. So Mark backs up that somewhat bleak prognosis by saying that the last 30 years were unusual.

[Mark Blyth]

Combination of China and Eastern Europe joining the global workforce, pushing down wages and pushing down prices.

[Waylon Wong]

A flood of goods coming out of China and post Soviet countries meant prices for phones and cars and fridges just got cheaper and cheaper. Also, basically, since President Gerald ford in the 1970s, it's been the norm for presidents to back away from pressuring the Federal Reserve. That's contributed to low inflation. But that norm obviously ended with President

[Mark Blyth]

Trump and ultimately because of the container ship, the IT revolution, globalization, all of which we're pushing down on prices, and all of those things are either going into reverse or coming to an end. So I think it's kind of inevitable. Add climate change into this as a series of supply shocks that are probably going to get more prominent and you have all the ingredients you need for sustained higher inflation rates.

[Darian Woods]

So if we are in an era where the value of our money just crumbles each year, Mark says this doesn't hit us all equally.

[Mark Blyth]

The story we like to tell each other that we all suffer from inflation simply isn't true because it varies across the income distribution. I like to say to people, if you shop at Whole Foods, you're impervious to inflation because you've been paying 30% more for your groceries than you ever should have.

[Darian Woods]

Yeah, a bit of fat in their spending they could cut down on.

[Mark Blyth]

Definitely. Right now, if you're shopping, if you're a single mom juggling two jobs and you're shopping at Dollar General and prices go up by 5%, you've got to make some serious choices.

[Waylon Wong]

So yes, the Whole Foods shopper might need to start going to Dollar General or the low cost supermarket Aldi, but relatively speaking, they're not as worse off as the low income shopper.

[Darian Woods]

So that's the broad picture. If you have more money, you can afford to make more choices. But going into specifics, one winner from an inflationary shock, Mark says, is someone who has a large mortgage on a low fixed interest rate, because as inflation gets the value of that mortgage Decreases inflation is generally good for borrowers with existing loans.

[Mark Blyth]

That's why all the boomers have huge houses.

[Darian Woods]

He says that's basically because many of them got a fixed rate mortgage before the high inflation of the 1970s.

[Waylon Wong]

Mark says another winner is someone who has their savings in the stock market. That's because in Mark's view, a lot of companies can quickly jack up their prices in an inflationary shock, and that raises those share prices. Take oil companies.

[Mark Blyth]

Oil companies made a tremendous windfall over the past couple of years, and this

[Darian Woods]

is what you'd expect for American oil companies. If Russia or Middle Eastern producers are blocked from exporting their oil, then that weakens those competitors. So American oil companies can profit from prices increasing.

[Waylon Wong]

To Mark, the calls that executives make with their shareholders are revealing, especially after the pandemic and Ukraine's supply chain shocks.

[Mark Blyth]

One of the things that we heard on earnings calls through the recent inflation was the spokesman for these corporations getting on the call to their investors and saying, oh, we are able to push on through prices in this period. This is great for our profits. So, you know, you could say, on the one hand, they're just talking their book to their investors. On the other hand, well, that's good camouflage for making abnormal profits.

[Darian Woods]

Yeah. So this was a very controversial point in the economics discipline was how much was corporate greed responsible for inflation.

[Mark Blyth]

Right.

[Darian Woods]

So sometimes the counter arguments were precisely that that was talking to investors, that profit margins, if you look across different industries, weren't actually that correlated with inflation. What's your response to the critics?

[Mark Blyth]

I think the critics are absolutely right that you can't start an inflationary period just with corporations doing this. Markets are reasonably efficient. If one of them tries to raise prices, the other one could eat their lunch. But when you get concentrated markets, when you have inflationary shocks, why wouldn't a firm try and take advantage of that?

[Waylon Wong]

A contrary take is that actually monopolies can more easily avoid passing on higher prices to consumers. They have greater profits that they can choose to eat into, whereas a super competitive company operating on tiny margins kind of has to raise prices or go out of business.

[Darian Woods]

But what is definitely true is that some products are easier for companies to raise prices on than others. Those products, as every Economics 101 class teaches, are facing inelastic demand.

[Mark Blyth]

And if you're at the top of the income distribution and you have a corporation with a critical inelastic demand thing that it sells, you can make a lot of money out of this.

[Waylon Wong]

Mark believes that corporations making a lot of money from inflation Includes banks.

[Mark Blyth]

So I'm guessing that you have a savings account somewhere. Could you tell me what the interest rate on your savings account is? Basically nothing, probably negative when you account for inflation. So when interest rates went up, the banks basically are able to charge more. They have a higher interest rate, but they didn't pass that through the savers. Right. So you're still getting like the square root of nothing in your savings account. And now they're charging 6%, 7% on their mortgages.

[Waylon Wong]

Now, this idea that banks will profit from the Fed raising interest rates isn't a fundamental law of nature. In the old days, when the Fed jacked up interest rates to fight inflation, banks also had to pay more to people with money in savings accounts. But in the 2008 Great Recession, the Federal Reserve responded by offering banks easily accessible loans that flooded banks with money, so they haven't needed to entice people to save with higher interest rates.

[Darian Woods]

And as for the losers from inflation, Mark says it succinctly in shorthand.

[Mark Blyth]

I just say the bottom 80%, the bottom 80% of the income distribution, of the income distribution. And really the bottom 40% are the ones that really, really suffer this because they don't have much in the way that they can augment their incomes. And if you're already juggling two jobs that are like low pay, then you're in real trouble. The top 20%, they're inflation protected. Everyone else isn't.

[Darian Woods]

I can go from Whole Foods to Aldi. Somebody' they don't have a lot of places to go.

[Mark Blyth]

Yep, somebody who can afford to shop at Whole Foods. I can assure you that I shop at Aldi all the time.

[Darian Woods]

Yeah, it's got some great prices. I gotta say.

[Waylon Wong]

Another Aldi shopper here.

[Darian Woods]

It's an inflation free zone, it seems.

[Waylon Wong]

You know what I've been doing? My local Albertsons chain has an app where you can look up prices. So before I go grocery shopping, I look up the price for every single item on my list and I note down the unit cost. And then I take my app to Aldi and for every item, I look up the price.

[Darian Woods]

Oh, my goodness.

[Waylon Wong]

And compare it to see who's cheaper. And now grocery shopping takes me five hours. But I. I'm saving at least some dollars.

[Darian Woods]

I think in a world of high inflation, I know who I'm going to be asking for advice.

[Waylon Wong]

Yeah.

[Darian Woods]

This episode was produced by Cooper Katz McKim and engineered by Jimmy Keeley. It was fact checked by Sierra Juarez. Caitlin Cannon is our editor. And the indicator is a production of npr.

[Announcer]

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