Moody's Talks - Inside Economics

Matt Colyar, an inflation expert and Assistant Director at Moody's Analytics, dives into the rising threat of stagflation. He discusses how higher tariffs and geopolitical conflicts are poised to push inflation rates up. Attention is also given to the potential for a recession, examining factors like labor supply and energy prices. Colyar emphasizes the role of consumer behavior in navigating economic fluctuations and the Federal Reserve's challenge in maintaining its inflation mandate amidst these pressures.

Sharon Parrott, President of the Center on Budget and Policy Priorities, dives into pressing fiscal issues affecting low- and moderate-income communities. She critiques the latest reconciliation legislation, warning it favors high-income earners while cutting essential programs like Medicaid and food assistance. The discussion highlights how tax cuts fail to stimulate growth and how these policies may deepen income inequality. Parrott urges a reassessment of budget priorities to safeguard vulnerable populations amidst the looming fiscal challenges.

Dante DeAntonio, Senior Director of Economic Research at Moody's Analytics, joins the hosts for a deep dive into the recent jobs report. They unravel the puzzling disconnect between weak job growth and a booming stock market. The conversation highlights alarming downward revisions to payroll numbers, suggesting signs of a recession. They also challenge the narrative around the low unemployment rate, questioning its accuracy amid underlying labor market weaknesses. The potential impact of declining employment on consumer sentiment sparks an engaging debate.

Tariff troubles take center stage as the hosts dissect a federal court ruling on previous tariffs and its ripple effects on prices and inflation. They lay out the implications of recent tax policies on the national debt and treasury yields. Expect lively debate on the necessity of TARP during the 2008 crisis and its long-term benefits. Consumer spending patterns are examined in light of anticipated tariffs, revealing stark contrasts across income levels. Finally, the team introduces a new recession indicator, estimating a 45% chance of an economic downturn.

Clifford Rossi, a distinguished Professor at the University of Maryland and former Chief Risk Officer at Countrywide, shares his insights on the future of housing finance. He discusses the potential privatization of Fannie Mae and Freddie Mac, highlighting the complexities in the current mortgage market. Rossi also presents his innovative proposal for revamping the homeowners insurance market amid natural disaster risks, emphasizing the need for creative solutions to support homeowners effectively.

Adam Kamins, Senior Director and Head of Regional Economics at Moody's Analytics, and Justin Begley, an Economist at the same institution, explore an array of engaging topics. They delve into rising student loan delinquencies and their economic consequences, alongside evolving international travel patterns post-pandemic. The pair also tackle housing challenges faced by older generations and share lighthearted statistics from a fun game involving labor market dynamics. The conversation culminates in a hopeful look at consumer confidence and positive trends, leaving listeners with an upbeat perspective.

Aaron Klein, Senior Fellow in Economic Studies at the Brookings Institution, returns to provide his expert insights. He discusses the latest economic indicators like CPI and PPI, shedding light on their implications for inflation and growth. The conversation delves into the effects of recent tariff changes on consumer confidence and recession risks. Klein also assesses emerging vulnerabilities in the financial system and highlights the importance of vigilance against potential crises, intertwining past warnings with current dynamics.

In this discussion, Scott Abrahams, a professor of economics at LSU, and Frank Levy, a strategy expert at Duke, tackle the complex impact of generative AI on labor markets and urban economies. They ponder whether AI will enhance or threaten job security and how it affects the value of college degrees. The duo reveals intriguing shifts in migration patterns, highlighting which cities might thrive, like Savannah, and which, including San Francisco, might face challenges. Their insights offer a glimpse into the future of work amid technological transformation.

Dante DeAntonio, Senior Director of Economic Research at Moody's Analytics, joins the hosts to analyze the latest job reports and economic indicators. They discuss the challenges in the U.S. labor market, from federal employee leave impacts to rising unemployment claims. The conversation highlights troubling trends in layoffs, particularly in tech, and explores the implications of tariff policies on consumer confidence. They provide insights on recession probabilities while painting a vivid picture of the economy as a 'thorny wilting rose,' with mixed signals and uncertainties ahead.

Richard Barkham, Senior Economic Advisor at CBRE, joins the podcast to discuss the outlook for commercial real estate and the economy. Richard is decidedly more sanguine than the podcast hosts. Mark, Cris and Marisa also discuss the economic team’s recent win for Most Accurate U.S. Forecast for 2023-2024 by Consensus Economics. They debate how much of the win can be chalked up to skill, luck, or the Chief Economist.Guest: Richard Barkham – Senior Economic Advisor, CBREHosts: Mark Zandi – Chief Economist, Moody’s Analytics, Cris deRitis – Deputy Chief Economist, Moody’s Analytics, Marisa DiNatale – Senior Director - Head of Global Forecasting, Moody’s AnalyticsFollow Mark Zandi on 'X', BlueSky or LinkedIn @MarkZandi, Cris deRitis on LinkedIn, and Marisa DiNatale on LinkedIn Questions or Comments, please email us at helpeconomy@moodys.com. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View.