Moody's Talks - Inside Economics Resilient or Fragile?
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Jan 2, 2026 The hosts reflect on the economy's performance in 2025, revealing forecast accuracy surprises. A debate brews over whether the year was resilient or fragile, with predictions for 2026 covering GDP, AI impacts, and labor market uncertainties. The conversation also delves into inflation risks from tariffs and potential Federal Reserve rate cuts. With detailed scenarios for economic outcomes, they discuss the balance between AI-driven productivity and its implications for job growth, all while pondering fiscal stimulus effects. It's a compelling analysis of a fragile yet hopeful economic landscape.
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Forecast Accuracy Varied Sharply
- Moody's forecast nailed average monthly job growth for 2025 at about 125,000 despite intra-year swings.
- Forecast accuracy varied widely: jobs were precise while stocks and house prices diverged from expectations.
Resilient Or Fragile Debate
- Cristian deRitis calls 2025 'resilient' because the economy withstood many shocks and grew near potential.
- Mark Zandi questions that label since growth was below potential and unemployment rose.
AI Offset Negative Supply Shocks
- AI acted as a positive supply shock in 2025 that partly offset negative shocks like tariffs.
- The panel credits AI for materially improving outcomes amid other headwinds.