We have hit a hinge moment in the economy. For the past few years, there has been one problem on policymakers’ minds: inflation. But in mid-September, the Federal Reserve called an end to that era when it cut interest rates by half a percentage point. Inflationluckyhub777, it was saying, is no longer the problem. It has come down from around 9 percent annually to around 2.5 percent. But unemployment is creeping up again. There are some signs of economic stress. Having spent the past year cooling the economy down, the Fed now feels it’s both safe and necessary to heat it back up, at least a bit.

The fact that inflation is over as an economic problem does not mean it is over as a political problem. Prices remain high, and people remain angry. And the inflation crisis, as we talked about in a past episode with Annie Lowrey, focused attention on the long-building affordability crisis: the cost of homes, of child care, of health care.

And so the 2024 election is still about the cost of living. But that’s not all that the next administration will have to deal with. What does it mean to fight the next economic war rather than the last one?

Jason Furman is an economics professor at Harvard Kennedy School and a former chair of the Council of Economic Advisers for Barack Obama. He’s closely tracked the inflation crisis over the past few years — and we talk about what he has gotten right and wrong there — and he’s deeply knowledgeable about the ins and outs of how economic policy is made. So I wanted to see what he thought the next administration would be dealing with and what he thought of some of the big policy ideas that Kamala Harris and Donald Trump have proposed.

This is an edited excerpt from our conversation for my podcast. For the full conversation, listen to “The Ezra Klein Show.”

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