Prof G Markets Why the U.S. is on the Precipice of a Recession — ft. Mark Zandi
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Aug 29, 2025 
Mark Zandi, Chief Economist of Moody's Analytics, joins the discussion to reveal the precarious state of the U.S. economy. He outlines the key factors contributing to heightened recession risks, such as minimal GDP growth and stagnant consumer spending. Zandi dives into how tariffs affect inflation and shares concerns over potential bond market instability. He also explores the influence of tech companies and AI on economic trends, while emphasizing the importance of central bank independence amidst political pressures.
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Economy Is Stalled And Vulnerable
- The U.S. economy is weak across GDP, consumer spending, construction, and manufacturing despite low layoffs.
- Job growth has stalled, creating vulnerability where small shocks could trigger a recession.
Stock Market Distorted By AI Winners
- Stock gains are narrowly driven by a few AI-focused tech giants and tax-driven corporate earnings.
- Removing these distortions, the market is essentially flat and consistent with the broader weak economy.
Recession Probability Near Historical Trigger
- Moody's machine-learning recession model shows a 49% chance of recession in 12 months, near a historical 50% trigger.
- Multiple traditional leading indicators (yield curve, Conference Board, industry payrolls) echo heightened recession risk.