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Rochefort co-CEO Kyle Bass analyzes the global economy as President Donald Trump signals a turning point in the U.S.-Iran conflict on ‘Mornings with Maria.’<\/p>\n
Despite triumphant headlines from Wall Street, one prominent economic forecaster is sounding the alarm that the U.S. economy is sitting on a razor’s edge.<\/p>\n
In a recent interview with TheStreet, Moody\u2019s Analytics chief economist Mark Zandi placed the probability of a U.S. recession within the next year at 40%, compared to a historical average of 5%.<\/p>\n
“So, 40% is very elevated, very uncomfortable \u2014 it gives you a sense of how close I think things are to the edge here,” he said.<\/p>\n
LEGENDARY ECONOMIST KNOWN FOR 1969-70 RECESSION PREDICTION WARNS DOWNTURN MAY HIT IN 2026<\/p>\n
Though his comments come on the heels of a better-than-expected April jobs report and stocks reaching fresh highs in recent weeks, Zandi pointed out that real disposable income has stalled year over year, showing 0% net growth.<\/p>\n
A trader works on the floor of the New York Stock Exchange (NYSE) in New York on May 19, 2026. (Getty Images)<\/p>\n
“Real disposable income \u2014 that\u2019s after tax, after accounting for inflation \u2014 is no higher today than it was a year ago. So, there\u2019s been no growth in purchasing power, and that\u2019s going to get worse and start declining,” the economist noted, adding that lower- and middle-class consumers are “living more paycheck to paycheck.”<\/p>\n
“You\u2019re gonna have to trade down,” Zandi continued. “You can\u2019t have beef \u2014 you gotta have chicken.”<\/p>\n
FOX Business host Larry Kudlow discusses how the economy is performing under President Donald Trump\u00a0 on ‘Kudlow.’<\/p>\n
The S&P 500, Nasdaq and Dow have posted a modest pullback since those fresh highs, which Zandi attributed to strength in artificial intelligence-related companies. He further explained the divergence between corporate equity gains and the broader U.S. economy.<\/p>\n
“The stock market\u2019s not the economy. In my 36 years as a professional economist, the stock market\u2019s never been more disjoint from the economy,” he said.<\/p>\n
“What\u2019s driving the stock market train is these big hyperscalers and chip companies,” Zandi added. “Valuations are awfully high\u2026 except for perhaps during the internet bubble, which didn\u2019t end so well.”<\/p>\n
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Billionaire investor Leon Cooperman discusses artificial intelligence performance and market uncertainty amid geopolitical concerns on ‘The Claman Countdown.’<\/p>\n
When it comes to equity investors banking on political intervention, Zandi said traders are increasingly betting that President Donald Trump will adjust policy levers to support the markets or the economy if a correction begins.<\/p>\n
“Stock investors are looking at the president, the president\u2019s looking at the stock market. That doesn\u2019t feel like a stable\u2026 equilibrium \u2014 it\u2019s kind of like a hall of mirrors,” he cautioned.<\/p>\n
READ MORE FROM FOX BUSINESS<\/p>\n
#Mark #Zandi #puts #U.S #recession #odds #warns #economy #edge<\/p>\n","protected":false},"excerpt":{"rendered":"
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