So, Mark Zandi—Moody’s chief economist and the guy who probably has more economic data bookmarked than you have TikToks saved—just casually dropped on X (formerly Twitter, because apparently we’re all still figuring that out) that the US economy is “on the precipice of recession.”
Cool. Cool cool cool.
Now, before you start panic-buying canned goods and converting your 401k into gold coins, Zandi isn’t saying we’re in a recession yet. He’s more like that friend who sees storm clouds and goes, “Hey, maybe grab an umbrella.” Except the umbrella is your financial stability and the storm is… well, economic chaos.
What’s Got Zandi Spooked?
Three words: policy, policy, policy. According to our economist friend, it’s not some mysterious market forces or cosmic alignment causing trouble—it’s good old-fashioned government decisions.
Tariffs are doing their thing (spoiler: making stuff more expensive), immigration policies are tighter than a jar of pickles, and businesses are basically sitting in the corner going “I don’t know what’s happening, so I’m not hiring anyone or investing in anything.” It’s like economic paralysis, but with more spreadsheets.
The Department of Government Efficiency cuts aren’t helping either, and even the Fed’s policies are acting like that friend who shows up to help you move but only brings a sedan.
How Bad Could It Get?
Here’s where Zandi gets real: he has no idea. And honestly? That’s refreshing. Most economists would give you seventeen different scenarios with confidence intervals, but Zandi’s basically saying, “Look, Trump’s economic policies are about as predictable as a cat on catnip, so your guess is as good as mine.”
Some industries are already having their own little recession parties—construction and manufacturing are apparently not having a great time. Meanwhile, everyone’s waiting to see if the Fed will cut rates in September, but Zandi thinks that’s like putting a Band-Aid on a broken leg. It might help a little, but it won’t fix the underlying problem.
What About Your Money?
If you’re hoping for a safe haven for your investments, Zandi has some bad news: “In a recession, no asset class is safe.” It’s like musical chairs, but everyone’s chair might disappear.
Bonds might do okay-ish if rates drop, but even the dollar and US Treasuries—traditionally the financial equivalent of hiding under a blanket—could lose their superhero status if tariffs keep climbing.
The Silver Lining?
Zandi thinks we’ll know the recession is ending when policy makers start acting less… chaotic. If tariffs stop increasing or immigration policy becomes more rational, that could signal clearer skies ahead.
But as he noted on X, don’t hold your breath for policy changes anytime soon.
So there you have it: your weekend economic reality check, served with a side of uncertainty and a dash of “we’ll figure it out as we go.” At least we’re all confused together, right?