The Federal Reserve has a new chair, Kevin Warsh, and he's inherited the economic equivalent of a lukewarm cup of coffee that somehow keeps getting more expensive. On Tuesday, the Labor Department announced that consumer prices were up 3.8% in April, year over year - the highest jump since 2023. The next day, the Senate confirmed Warsh, handing him the Fed's dual mandate to keep inflation low and the labor market strong, which sounds great in theory and is proving to be a headache in practice.
Brown University economist Mark Blyth sat down with NPR's Elissa Nadworny to offer some unsolicited advice for the new chair and to gently explain why your grocery bill looks like it's been through a prizefight. "Oh, we keep waiting for the settle down, don't we?" Blyth said, when asked if the inflation spike was just a war-in-Iran hangover. "You know, it was all meant to be transitory, and even life is transitory if you wait long enough, but 3.3% in March, 3.8% in April, I mean, it's getting up to 4%. This is serious."
Blyth noted that while energy accounts for about 40% of the price jump, housing and rents are also misbehaving, and a basket of groceries is up 25-30% since the beginning of 2021. Eggs, he pointed out, never really went back to normal - because of course they didn't. President Trump's tariffs likely contributed about 0.8% to the inflation total over the past year, though Blyth admitted the estimates have a "big error margin." He also flagged other delightful factors: deportations of agricultural workers, an AI-fueled stock market boom driving up prices on drywall and building supplies for data centers, and a big federal deficit pumping money into an economy with limited supply. "It's got to go somewhere," he said, "and it shows up in prices."
As for what the average American can do? Not much, unfortunately. Blyth noted that the labor share of national income hit an all-time low of 53.8% at the end of 2025 (it's since crept to about 54%), while corporate profits - usually around 7-8% of national income - are now at 12%. "There's been this giant vacuuming up to the top," he said. Wages aren't rising enough to restore purchasing power, and the labor market, while not yet in 1970s-style stagflation territory, is "very, very grinding" for the 60% of the population struggling to make ends meet.
So what will the Kevin Warsh economy feel like? According to Blyth, if you're in the top 20% of income distribution and shop at Whole Foods, you've been overpaying for years - no big deal. For everyone else, it's expensive gas that's going to stay expensive, rents that keep going up because nobody's building enough new supply, and a general sense that your dollars are buying less and less. "Sticky in the sense that you're stuck," Blyth summed up. Welcome to the new Fed chair's inbox.