Zandi Predicted the U.S.’s Stagnation Period and Potential Fall

Published: 22 Aug 2025

Author: Precedence Research

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The Moody’s Analytics chief economist, Mark Zandi, sees the US economy in trouble. He forecasted his views in a post on X about the US economy’s brink of stagnation, according to some recent economic data. Also, Zandi mentioned his skeptical or diplomatic thought by saying he doesn’t think that the stagnation is close in the US economy yet. His views are imbalanced due to specific industries sinking in the past years.

He clarified that the U.S. economy is crashing from the heavy storms and waves of tariffs and the restrictions on the immigration policy. Zandi’s in-depth analysis indicates that many factors point to challenging economic conditions due to the significant rise in costs. This situation will likely delay or prevent new resources from entering the company and hinder business investments, ultimately harming the structure of the U.S. economy. On tariffs, Zandi did not put out any questions; he said it’s a mild wave till now, with the rise in price. 

Zandi also mentioned in his post on X that he views stagnation will leading to a decline in jobs among job seekers and talented youths, which will impact for a few months. Again, he clarifies that the US economy is not in stagnation yet. As most of the numerous industries are in a stagnation, like the manufacturing and construction industries. The September rate reduction could stabilize the us economy, which will change the perspective, according to Zandi.

Zandi finds it hard to predict the recession era and its impact clearly as of now. With the unexpected decisions of President Donald Trump’s economic policies, the unpredictability is obvious. We have no idea how long the stagnation will last and how according by the changing policies. 

How Can Investors Play Out the Downturn?

As some asset classes are bearable than others, there may not be any option to the extreme downturn. Most of the downturn is unpredictable in the economic policy. Zandi stated that it's not clear enough regarding the economy’s endanger to the recession, but he thinks if the us comes into a downturn situation, then the changes in the economic policies that will cause recession will also indicate the end of the recession period. If the tariffs remain the same, then things can be managed, but if they keep increasing, the doors to solutions will also be closed.