Peter Orszag and Adam Posen Warn U.S. Inflation May Rise

On January 18, Lazard CEO & Chairman, Peter Orszag and Adam Posen, President of the Peterson Institute for International Economics, published a LinkedIn article titled "The Risk of Higher U.S. Inflation in 2026" examining why U.S. inflation could exceed 4 percent in 2026.

They outline that while many expect inflation to continue to trend towards the Fed’s 2 percent target, several forces, including the lagged effects of tariffs, an expansion in the fiscal deficit, a tighter labor market, looser monetary policy, and upward drifting household inflation expectations, could increase inflation this year. Taken all together, they argue we are entering 2026 with a macro environment in which inflation rising above 4 percent by the end of 2026 is not only plausible but could arguably be the most likely scenario.

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