President Trump says he is directing Fannie Mae & Freddie Mac to purchase $200 bil of mortgage-backed securities in an effort to bring down mortgage rates and address the severe housing affordability problem. Fixed mortgage rates have, in fact, declined by 10-20 bps to just over 6% on the news.

After cogitating a bit on the December jobs data, I’m increasingly convinced that the job market is struggling, and the broader economy is fragile, in big part due to U.S. tariffs.

Despite the considerable drama, the economy’s performance in 2025 is set to come in close to what we had forecast for the year when we did our projections at the end of 2024. That is, the economy did okay in 2025, although it fell well short of its 2024 performance.

@markzandi.bsky.social joins EconoFact Chats to discuss the state of the economy, focusing on consumer sentiment, Fed Independence, and likely trends in inflation, unemployment, and GDP growth in early 2026. econofact.org/podcast/the-...

"The shape of the financial system has shifted from where it was in the Great Financial Crisis, from a bank-centric hub-and-spoke system with the banks in the middle and everyone else around the periphery to more of a web, with private credit more central in that web." - @markzandi.bsky.social

What have we learned from these first few months of talks? @scottlincicome.bsky.social of @cato.org, Ramesh Ponnuru, @natasharsarin.bsky.social, @michaelrstrain.bsky.social, @justinwolfers.bsky.social and @markzandi.bsky.social weigh in:

Mark Zandi: “The housing downturn to date has been mostly about the depressed existing home sales. New home sales, housing completions, and house prices have held up well—that’s about to change.” http://f-st.co/M6nFvD7

I sent off a yellow flare on the housing market in a post a couple of weeks ago, but I now think a red flare is more appropriate. Home sales, homebuilding, and even house prices are set to slump unless mortgage rates decline materially from their current near 7% soon. That, however, seems unlikely.

How do trade, spending cuts, and policy uncertainty affect growth? @markzandi.bsky.social of Moodys Analytics warns that while a recession isn't imminent, long-term U.S. growth could suffer. Listen here: econofact.org/podcast/thro...

Another sign of a softer job market is rising unemployment insurance claims. Continuining claims are up, and signaling a slump in hiring. Initial claims are also up as of late. Anything north of their current near 250k per week would suggest layoffs are rising, and the job market is stalling.

The more I cogitate on the May jobs report, released last Friday by the BLS, the more uncomfortable I get about the economy’s prospects. There are a bunch of reasons why (listen to this week’s Inside Economics podcast), but high on the list is the sharp drop-off in labor force growth.

The job market is steadily but surely throttling back. Monthly job gains are moderating, and most telling, the gains are being consistently revised lower, and not by a little bit. Indeed, after revision, monthly job gains appear to be closing in on 100k.

Fannie Mae & Freddie Mac’s fate is back under debate, 15 years after entering conservatorship. Their stock prices are up, but what’s next for the GSEs? Here’s a breakdown of the most likely scenarios over the next few years, their probabilities, and their impact on mortgage rates:

I’m perplexed by the narrative that while the so-called soft economic data are in the dumper, the hard economic data are just fine. Really? No argument regarding the soft data. Consumer, business, and investor sentiment is about as dark as it gets, but the hard data have also taken on a shadowy hue.

A high and rising number of American households are under mounting financial stress. That’s the message in the April delinquency rate data we calculate based on all the credit files in the country from the credit bureau Equifax.

After digging deep into the economic data released last week, from GDP to jobs, and all the releases in between, here’s why I’m even more concerned about the economy’s prospects:

The April jobs report shows the economy is not in recession, despite the Q1 decline in GDP. Employment increased 177,000 in the month, suggesting the job market remain a firewall between continued growth and a downturn.

OPINION TODAY featured podcast — Chuck Todd is joined by @markzandi.bsky.social, chief economist at Moody’s Analytics, to discuss the damaging effects of President Donald Trump’s tariffs and trade war on the U.S. economy. opiniontoday.substack.com/i/162029400/...

The Trump administration’s policies are set to severely diminish the economy, not only for the next few months but for years. The administration’s trade war is undermining the global safe-haven status of the U.S., which has provided incalculable benefits, including our economy’s exceptionalism. 🧵

Another great discussion with @markzandi.bsky.social trying to explain what the Trump admin is trying to do with tariffs. It’s the most complete explanation I have heard though I disagree they are competent or honest actors in their plan. #tariffs #econsky podcasts.apple.com/us/podcast/m...

The U.S.’s global safe haven status is severely damaged by the U.S. tariffs and resulting global trade war. Global investors rightly question whether the U.S. is money good – the global economy’s Aaa credit. Thus, the spike in the long-term Treasury yields and the weaker U.S. dollar in recent days.

In the latest episode of The Delegates Lounge podcast, we're joined by Moody's Chief Economist @markzandi.bsky.social. Three guesses which classic movie reminds him of the present moment. Listen apple.co/4ejt5jE or wherever you get your podcasts.

“The thing that worries me is that our economies are now quickly moving apart. They already have decoupled and they're disengaging. And it's becoming self-reinforcing.” @markzandi.bsky.social on the #Tariffs impact on US-China relations. podcasts.apple.com/us/podcast/t...

It was encouraging to see the President reverse himself on the so-called “reciprocal” tariffs yesterday, but I wouldn’t take much solace in it as the global trade war continues to rage. I still put the odds of a recession this year at 60%.

Global businesses are now signaling recession. This is according to Moody’s weekly survey of businesses we’ve conducted for over 20 years. President Trump’s shocking hike in U.S. tariffs and China's tit-for-tat response crushed global business sentiment last week. 🧵

Are we headed to a slower economy and faster rising prices? @markzandi.bsky.social of Moody's Analytics discusses the impacts of the Administration's policies, and policy uncertainty, in this new @econofact.bsky.social Chats episode. econofact.org/podcast/look...

As President Trump's self-proclaimed "Liberation Day" approaches on April 2nd, bringing with it a wave of new tariffs, @thedelegateslounge.bsky.social chats with Moody's Chief Economist @markzandi.bsky.social. Hear more of our conversation on Apple Podcasts apple.co/4ejt5jE or wherever you listen.

I’m raising my odds that a recession will begin at some point this year to 40%, up from 15% at the start of the year. Last week’s economic data were disconcerting, including the slide in consumer confidence, punk consumer spending, and persistently high inflation.

Leading Indicator #2 -the FHA mortgage delinquency rate. This isn’t common on leading economic indicator lists but it may be a proverbial canary in the coal mine in the current context. FHA borrowers have low to moderate incomes, with a median income of 75k a year, and most are 1st time homebuyers.

Leading indicator #1 – Conference Board survey of consumer confidence.

It's hard to fathom, but we are back on recession watch. The economy was performing exceptionally well at the start of the year—it was the strongest economy on the planet. But here we are.

Moody’s chief economist Mark Zandi discusses President Trump’s baffling economic strategy, and explains why he sees the risk of recession rising by the day.

For a more in-depth discussion on the latest U.S. employment report, the potential impact of DOGE cuts and the on-again, off-again tariffs that have developed in recent weeks tune in to our latest Inside Economics podcast. Listen here: podcasts.apple.com/us/podcast/m...

This week’s episode of One Thing Trump Did is out now on The Middle’s podcast feed! We dive into the potential economic impacts of President Trump’s tariffs on Canada, Mexico and China. Jeremy’s joined by @markzandi.bsky.social, Chief Economist for Moody’s Analytics. www.iheart.com/podcast/1119...

The risks of a U.S. recession starting in the coming year are uncomfortably high and rising. I would put them at 35%, up from 15% at the start of the year. For context, the typical recession probability is 15% - the U.S. economy historically suffers a recession every 6 or 7 years on average.

Stroke of the pen risk. That’s what businesses and investors call the risk that the President will, in an instant, dramatically change tariffs, DOGE cuts to government jobs and funding, and immigration policy using an executive order.

The economy appears to be gagging on the uncertainty created by the haphazard economic policymaking happening in DC. Retail sales, manufacturing production, real consumer spending, home sales and most telling, consumer confidence, are all down meaningfully in the past month or two.

With the stock market on its back heels the past couple of trading days, it is worth noting how important the well-to-do (those who own the bulk of stocks) have been to driving consumer spending and, by extension, the broader economy.

I don’t typically pay much attention to the small business sentiment survey conducted by NFIB each month. Respondents’ political bias is clear – it skews Republican. Thus, it is not surprising sentiment has decidedly improved since the election.

Broad-based tariffs will lead to higher inflation and result in job losses for Americans. www.pbs.org/newshour/sho...

Today’s report on January consumer price inflation overstates the case, but makes the case that the disinflation (slowing in inflation) we’ve enjoyed since summer 2022 is over. The case is overstated as many businesses raise prices at the start of the year.

The developing trade war will result in higher inflation and interest rates, as well as diminished economic growth. And it is unclear to what end. My analysis on the potential economic fallout: www.economy.com/getfile?q=BF...

Here’s @markzandi.bsky.social’s take on Trump’s tariffs on Canada, Mexico and China

If you needed any more evidence of froth in asset markets, consider the recent hysteria over President Trump’s newly-minted meme coin. This is a cryptocurrency unveiled by the President just a few days ago on social media.

Jim Parrott and I put out a piece on the importance of the GSEs’ implicit government guarantee upon their release from conservatorship, and the challenge that will pose for the Trump administration. Available here: www.economy.com/getfile?q=D6...

Out now: Glenn Hubbard, former chairman of the Council of Economic Advisers joins the Inside Economics podcast to discuss the surprising employment report and analyze the Trump administration's economic policy proposals. Listen here: podcasts.apple.com/us/podcast/o...

All eyes should be on the bond market. The 10-yr Treasury yield is up well over a percentage point in the past 3 months and is closing in on 5%. There’s a bunch of reasons for the higher rates, but most significant is the prospect for broad-based tariffs, deportations and deficit-financed tax cuts.

The US and Chinese economies are fast de-coupling. That’s the clear story told by this starburst chart, which shows the trade flows between industries across countries in 1996, 2018 and 2023.

Economists are loath to use anecdotes in their work, but this H-1B blowup brings to mind a personal story. Before being Moody’s Chief Economist, my brother, best friend and I started an economic consulting firm - Economy.com - that we sold to Moody’s.

While not proof, this chart strongly suggests that more foreign immigrants results in more new businesses. This is intuitive, as immigrants are by definition risk-takers. It takes guts to move to another country in search of opportunity.