Moody’s chief economist: Trump policies “gagging” economy



Mark Zandi, Chief Economist at Moody’s Analytics, has issued a stark warning about the economic challenges posed by the Trump administration’s policies. He described the U.S. economy as “gagging” on uncertainty caused by tariff wars, federal workforce reductions, and cuts to government programs, all of which are dampening consumer confidence, business investment, and hiring. Zandi emphasized that these factors, combined with looming issues like a potential government shutdown and rising inflation, could significantly harm economic growth.

Why the gloomy forecast?
Zandi suggests that tariffs on imports from countries like China, Canada, and Mexico act as a tax on American consumers, potentially increasing household costs by over $1,200 annually. He also expressed concerns about rising inflation and slowing GDP growth, predicting that these trends could lead to job losses and further economic strain if retaliatory tariffs are imposed by other nations.

Does Zandi have a point?
Economic indicators are already showing signs of trouble. The Federal Reserve Bank of Atlanta projects a 2.8% contraction in GDP for Q1 2025, marking the first quarter of negative growth in three years. Consumer confidence has plummeted, retail sales are declining, and layoffs are increasing—all pointing toward a possible recession.

What is Moody’s Analytics?
Moody’s Analytics is a subsidiary of Moody’s Corporation, established in 2007 to focus on non-rating activities, operating separately from Moody’s Investors Service. It provides a wide range of economic research, data, financial modeling tools, consulting, training, and risk management software. These offerings help professionals in capital markets, credit risk management, and financial services make informed decisions in an evolving marketplace.

The company operates internationally with offices in locations such as London, Sydney, Prague, and West Chester, Pennsylvania. Its tools and services are widely used by financial analysts, corporate finance professionals, asset managers, and credit analysts worldwide.

In 2024, Moody’s Analytics rebranded to “Moody’s,” reflecting its broader scope beyond analytics.

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