Zandi Warns US Near Recession as Inflation Nears 4% and Real Income Stalls
Updated
Updated · Business Insider · Jun 4
Zandi Warns US Near Recession as Inflation Nears 4% and Real Income Stalls
3 articles · Updated · Business Insider · Jun 4
Summary
Moody's chief economist Mark Zandi said U.S. growth is running below potential and the economy is flashing recession signals even though GDP is still expanding.
Nearly 4% inflation, driven by tariffs and fuel costs from the Iran war, is colliding with a soft labor market, leaving real wage growth almost stalled and real disposable income flat over the past year.
That mix limits the Fed under new Chair Kevin Warsh: below-potential growth would normally argue for rate cuts, but inflation well above the 2% target could instead force hikes if expectations keep rising.
Zandi said avoiding a downturn depends first on ending the Iran war to normalize oil prices, while continued AI investment is another key support for broader growth.