From the Desk

The longest government shutdown in U.S. history is finally over. So, let’s hope we quickly get delayed paychecks out the door and government statisticians back in their seats. With a lot going on in the economy, delayed income and missing data are not ideal. One thing that has come to the fore is affordability. More households are getting concerned about food prices in particular. In recent elections, the cost of living was the pivotal issue that led to upset results. And polls on President Donald Trump’s handling of the economy and inflation keep dropping.

However, it appears the administration is getting the message. Treasury Secretary Scott Bessent recently mentioned forthcoming tariff exemptions for certain foods. While the President has been considering a possible household tariff rebate or stimulus check, Bessent seems to want to be more targeted. And for good reason: about 60% of household spending is in four sectors – health care, energy, housing and food.

One issue that is quickly becoming critical is increasing utility bills. The fast moving AI datacenter buildout is the culprit. States are already trying to devise how best to bifurcate household and datacenter billing rates, so consumers aren’t shocked. AI is also forcing an upgrade of an aging energy grid to achieve more efficiency. But long lead times are needed for greater nuclear and gas buildout. The quickest near-term solution may be more renewable energy, which has been out of favor with this administration. But politicians will need to be pragmatic, as there is mounting, widespread evidence that affordability is the number one data point on household dashboards. And voters are not being patient as they demand solutions.

Sources: Bloomberg, Real Clear Politics, Financial Times, 2025.