As Americans prepare for Thanksgiving, price questions continue to loom large—even as the White House touts a “25 percent cheaper” holiday bundle from Walmart. But as Institutional Risk Analyst editor Christopher Whalen told host Dan Proft on Chicago’s Morning Answer, the claim leaves out a crucial detail: the bundle is cheaper because it omits staples like sweet potatoes, cornbread, broth, cranberry sauce, pecan pie, and whipped cream. “Shrinkflation is the story,” Proft said. Whalen agreed, arguing that Americans are still struggling to understand why grocery bills remain stubbornly high despite improving inflation numbers.
Whalen pointed to two interlocking forces driving the affordability crisis: the Federal Reserve’s long-standing liquidity policies and the government-imposed cost structure businesses face. He traced the roots of today’s housing and food inflation back to 2019, when the Fed began aggressively expanding liquidity even before the pandemic. “That drove housing prices,” he said, and the ripple effects are still being felt. Meanwhile, landlords and retailers alike are absorbing rising operating costs that have nothing to do with greed, Whalen argued, but everything to do with higher wages, supply costs, and regulatory burdens. “A grocery store is lucky to make a couple percent,” he said. “Most of their cost is people and inventory. Their margins are tiny.”
That tension, Whalen said, explains why big-city retailers like Walgreens and CVS have quietly reduced their urban footprints—and why New York City’s new mayor cannot single-handedly reverse the cost of living. “It’s a Washington problem,” he said. “Spending and the Fed have throttled price increases dramatically.” Even so, he noted that many affluent urban residents remain insulated from bad policy and continue to project a sense of normalcy. “The restaurants are full and the theater crowds are strong,” Proft observed, “so people conclude the city is vibrant.” Whalen said that illusion persists in New York too, even as commercial real estate vacancies surge and middle-income families continue to leave.
On housing policy, Whalen dismissed proposals—floated recently by Trump and others—to introduce 50-year mortgages as a path to affordability. “It doesn’t work,” he said. “There’s no market for 50-year Treasury securities, which is how you price a mortgage.” Instead, he advises buyers with tight budgets to consider floating-rate mortgages if they believe rates will fall in the coming years.
Whalen also weighed in on Bitcoin’s sharp pullback over the past month. In a recent column titled Wall Street Killed Bitcoin, he argued that crypto’s original purpose has been fundamentally compromised. “It’s become purely speculative,” he told Proft. Wall Street-backed futures contracts and exchange-traded funds have turned Bitcoin into just another high-volatility asset class. “When a big holder sells, the price drops 5 or 10 percent. That’s unacceptable volatility.” He expects Bitcoin to remain on the margins of the financial system, a “plaything” for speculators rather than an alternative currency. “Bitcoin is an option to take advantage of a greater fool,” he said. “If you understand that, you understand everything.”
Even so, the crypto faithful show no sign of wavering. “They’re true believers,” Whalen said, likening the culture to a mass movement in the Eric Hoffer mold. But he warned that many have refused to take profits when they had the chance and may pay the price. “I tell them: buy real estate or gold. Take your winnings off the table. Don’t wait until this thing drops 50 percent.”
As for the broader economy, Whalen believes progress is being made in clawing back the purchasing power lost over the past three years—even if many voters don’t yet feel it. “There are no magic wands,” Proft said, urging clearer communication from policymakers. Whalen agreed, noting that affordability challenges will persist so long as housing, wages, and production costs remain elevated. But the trajectory, he argued, is beginning to turn.
“Americans dug out of a deep hole,” he said. “We’re not back to normal yet, but we’re moving in the right direction.”