The US economy may be edging toward a recession, according to Mark Zandi, chief economist at Moody’s Analytics. Speaking to Business Insider, Zandi pointed to a mix of policy missteps and speculative market behavior—including the surge of meme assets like Dogecoin (DOGE)—as key contributors to the slowdown.
“The reason why the economy is on the precipice of recession is policy,” Zandi said. “If we go into recession, just how deep and long it will be will be because of policy.”
Policy Headwinds
Zandi identified Trump-era tariffs, restrictive immigration measures, and recent Federal Reserve decisions as major drags on growth. He argued these policies have created uncertainty, delaying business hiring and investment. Cuts to the Department of Government Efficiency, he added, have further weighed on momentum.
While the US is not officially in recession yet, Zandi noted that sectors like construction and manufacturing are already showing signs of contraction.
Tariffs & Consumer Impact
The economist warned that households have not yet absorbed the full impact of tariffs. “They’re slowly but still being passed through, and that’ll become vividly clear in the next few months,” he said. Rising prices, he cautioned, will squeeze budgets and weaken consumer spending.
Recession Outlook
If recession takes hold, Zandi expects a sustained decline in job growth across several months. Potential rate cuts may cushion the blow but won’t be enough to prevent downturn, he said.
For investors, his advice was stark: “In a recession, no asset class is safe.” He even warned that rising tariffs could erode the safe-haven status of US Treasurys and the dollar, long viewed as pillars of global financial stability.
