The US economy may be growing, but Moody’s chief economist Mark Zandi says that doesn’t mean it’s in a healthy state.<\/p>\n
The economist hasn’t been shy<\/a> lately about his bearishness on what’s ahead of the US. In his most recent newsletter<\/a>, Zandi noted that while GDP has risen this year and the economy appears resilient, he sees warning signals flashing.<\/p>\n “The economy is growing, but at a rate below its potential, so the situation is tenuous,” he said. “Unless growth picks up, unemployment will rise and participation will fall, and at some point, undermine growth altogether.”<\/p>\n Zandi has repeatedly warned<\/a> of the negative impact on the US economy caused by Donald Trump’s tariff and immigration policies. In 2025, he described it as being on the edge<\/a> of recession, a forecast that grew increasingly more bearish<\/a> in the months that followed.<\/p>\n He acknowledged in the newsletter that the economy held up despite the headwinds he’s been seeing, but he sees more cause for concern as consumer prices, specifically fuel costs pushed higher by the Iran war, surge. He’s among the forecasters who have said the impacts of the war will offset the benefits<\/a> of the Trump administration’s tax cuts.<\/p>\n But Zandi sees issues cropping up elsewhere, too.<\/p>\n “The soft job market is depressing wage growth, and with inflation accelerating, real wage growth has all but stalled,” Zandi said. “Real disposable income<\/a> has not grown over the past year.”<\/p>\n Then there’s monetary policy. Zandi highlighted potential problems he sees as a new era begins under Federal Reserve chair Kevin Warsh. Despite initially describing him<\/a> as a “reasonable choice” to lead the central bank, Zandi said he has concerns.<\/p>\n Specifically, he’s worried about the fact that the central bank isn’t in a position to pursue policy that would boost the economy and prop up job growth, namely, cut interest rates.<\/p>\n