Democrats are making “affordability” one of their main issues for the midterm campaign. Ironically, when Democrats talk about the cost of living they never seem to consider the cost of government. I know how they could make my life more affordable–stop spending so much of my money.
The main cost of living issue is the cost of gasoline at the pump. Prices spiked because of the conflict in Iran, and are now coming down. This chart shows the price of Brent Crude from June 2021 to June 12, 2026. The price peaked within $1.70 of the Biden administration high of $112.24, and the current price of $73.86 is below the average of the Biden years:
Inflation expectations are also modest. This chart shows the five-year break even inflation rate, which the Federal Reserve Bank of St. Louis describes as follows:
The breakeven inflation rate represents a measure of expected inflation derived from 5-Year Treasury Constant Maturity Securities (DGS5) and 5-Year Treasury Inflation-Indexed Constant Maturity Securities (DFII5). The latest value implies what market participants expect inflation to be in the next 5 years, on average.
The chart runs from July 2021 to yesterday:
So the markets predict the inflation rate over the next five years to be 2.2%.
There is no basis here for the inflation scare that the Democrats are trying to perpetrate, but the press will do all it can to help them sell an “affordability” crisis.
