Economist Predicts Rough Year Ahead for U.S. Economy Amid Trade Tensions

Mark Zandi, Chief Economist at Moody’s Analytics, is sounding the alarm over what he believes could be a turbulent stretch for the U.S. economy.

In a recent interview, Zandi cautioned that ongoing trade conflicts, rising tariffs, and global uncertainty are pushing the U.S. dangerously close to recession territory.

He believes there’s now a better-than-even chance that the world will slip into a recession this year. The outlook, according to Zandi, has been weighed down by deteriorating trade dynamics, with little sign of resolution. “Every day the trade war drags on,” he warned, “the damage grows.”

Zandi argued that the lack of clarity in economic policy is shaking business and consumer confidence. While a policy reversal could still avert the worst-case scenario, he admitted his optimism is fading. He expects the coming six to twelve months to test both markets and households, even if a formal recession doesn’t take hold.

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The real estate sector, already strained by affordability and credit issues, could face some of the harshest impacts. Zandi’s warning joins a chorus of concern from other top names in finance. JPMorgan’s Jamie Dimon has cautioned about the drag of U.S.-China tensions, while economist Steve Hanke and Bridgewater’s Ray Dalio have both flagged systemic risks if current policies persist.

With recession odds climbing—now hovering around 72% on prediction markets—investors and businesses may need to brace for a period of economic stress as 2025 unfolds.

Alexander Stefanov