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Mark Zandi: latest market views
Moody's Analytics
Summary
Mark Zandi is chief economist of Moody's Analytics, where he directs economic research, and a co-founder of Economy.com (acquired by Moody's in 2005) and host of the Inside Economics podcast.
Chorus has 21 views from Mark Zandi across 3 episodes on Prof G Markets and CNBC Closing Bell since October 15, 2026.
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The latest views
Newest first. Every quote is checked against the episode's transcript.
October jobs report was solid, with enough hiring to hold unemployment low, though noisy.
Zandi calls the October jobs report surprisingly solid and says it makes a strong case that the labor market is in good shape. Job creation is at least enough to hold unemployment low and labor force participation steady, which is close to full employment. He warns the report is noisy and overstates strength. Last month's numbers were very weak and this month's very strong, so the truth is somewhere in between.
“Well, Mike, it was a really solid report. ... it's making a pretty strong case that the labor market's in pretty good shape.”at 10:48
CNBC Closing Bell: Closing Bell Overtime: Markets End a Wild Week With AI Under Pressure 11/6/26 ·
Fed very likely hikes in December; one or two more hikes possible in 2027.
Zandi says Fed members are still nervous about elevated inflation. The strong jobs report and a likely soft core CPI print give the Fed room to raise rates. He sees a very high probability of a December hike. He is less sure about 2027: higher rates and a weaker stock market should soften the economy. If the Iran situation helps inflation fall, this could be the last hike, otherwise one or two more in 2027.
“I think there's very high probability they hike in December.”at 11:47
CNBC Closing Bell: Closing Bell Overtime: Markets End a Wild Week With AI Under Pressure 11/6/26 ·
Economy likely softens next year as higher rates and a weaker stock market bite.
Zandi says the labor market and general economy will soften because of higher interest rates and a weaker stock market. The S&P 500 has gone nowhere for six months, which should take some steam out of wealth and consumer spending. He expects this to damp the economy and keep future Fed hikes in check. He is less confident about 2027 than about December.
“My sense is that the labor market and general economy are gonna soften here given the higher interest rates that we're now experiencing in the weaker stock market.”at 12:09
CNBC Closing Bell: Closing Bell Overtime: Markets End a Wild Week With AI Under Pressure 11/6/26 ·
Mortgage rates above 7% have frozen the housing market; rate-sensitive sectors are hit hard.
Zandi says fixed mortgage rates above 7% have done a number on housing. The market was in a deep freeze before that and is now frozen solid. Commercial real estate and anything else sensitive to interest rates is taking a hit. This is one way the market has tightened financial conditions in response to Fed policy.
“fixed mortgage rates over 7% has really done a number on the housing market. ... Commercial real estate, anything interest rate sensitive is really taking it on the chin.”at 13:08
CNBC Closing Bell: Closing Bell Overtime: Markets End a Wild Week With AI Under Pressure 11/6/26 ·
AI boom is adding about 0.3 points to consumer inflation via electricity and chips.
Zandi cites the consumer expenditure deflator, which is up about 0.3 percentage points year over year because of AI. The AI boom has boosted growth through capex and wealth effects from higher stock prices. That spending pushes up electricity prices, chip prices and consumer electronics costs. If AI cools, inflation pressure eases and the Fed needs fewer rate hikes.
“if you look at consumer expenditure deflator inflation, it's up about a quarter point three tenths of a percent above a year ago because of AI. That goes to electricity, that goes to chips”at 14:29
CNBC Closing Bell: Closing Bell Overtime: Markets End a Wild Week With AI Under Pressure 11/6/26 ·
AI market is getting ahead of itself; cooling now lowers the risk of a bigger shakeout.
Zandi's firm forecasts AI investment, and he says the required assumptions are heroic: strong demand, compute, cost of capital and financing must all line up. Higher valuations combined with higher rates are weighing on AI stocks. He thinks the market is getting ahead of itself. A cooling-off now makes a bigger shakeout less likely, so it could be healthy for the economy and the AI industry in both the near and long run.
“It still feels like to me the market... The AI market industry is getting ahead of itself. ... you got to make some pretty heroic assumptions about demand and compute and cost of capital”at 14:53
CNBC Closing Bell: Closing Bell Overtime: Markets End a Wild Week With AI Under Pressure 11/6/26 ·
Wealth, inequality & billionaires
Most Americans own little stock, so AI stock moves barely affect their finances or how they feel about the economy.
Three-quarters of Americans don't own stocks of any consequence, and many don't own homes. For them, what happens to AI stocks means nothing. The stock market can go up or down, and it doesn't matter to them. What matters is whether wages are keeping pace with the prices of what they buy, and for most people they are not.
“three fourths of Americans don't own stocks of any consequence, and many don't own their own homes. So what's going on with regard to AI stocks means nothing.”at 30:59
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
Real wages are falling as inflation outpaces pay, so household purchasing power is eroding.
After-inflation income has been falling over the past six months, and inflation is growing faster than wages. That means people's ability to buy things is declining, and they feel it. This is why consumer sentiment surveys are so weak and why the polling looks the way it does. About three-quarters of Americans don't own stocks of any consequence, and many don't own their homes, so for them the financial situation is tenuous. Zandi says their real standard of living is on the decline even if they have a job.
“the picture is pretty bleak. I mean, real wages are going down. Inflation is faster than the rate of growth in wages.”at 31:31
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
Fixed mortgage rates jumped above 7% from under 6% after the war began, making homeownership unaffordable.
The benchmark fixed mortgage rate was below 6% before the war started and is now well above 7%. That is the rate most people think about when they consider a mortgage, and the increase makes housing and homeownership completely unaffordable. Higher credit card rates, home equity line rates and consumer finance loan rates add to the squeeze on households that don't own AI stocks.
“the fixed mortgage rate... it was below 6% before the war started. It's now well above 7%.”at 32:12
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
The Iran war is the most immediate driver of rising inflation and interest rates.
Among the policies hurting the economy, the Iran war is the most obvious and most immediate cause. Inflation and interest rates have risen pretty much since the day the war started on February 28. That rise is what has pushed fixed mortgage rates from below 6% to above 7%, and it is hurting households already squeezed by real wage declines.
“the Iran war is the most obvious, most immediate. I mean, inflation and interest rates have risen pretty much since the day the war started back on February 28.”at 34:36
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
Tariffs act as a tax on American consumers, raising inflation and weakening economic growth.
Tariffs do the same kind of damage to the economy as the Iran war. They raise inflation because they are a tax on consumers, passed through as higher prices, and that weakens economic growth.
“It raises inflation. It's a tax on American consumers, raises inflation through higher prices, which weakens economic growth.”at 34:53
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
Heavy-handed immigration policy shrinks the labor supply, pushing up prices and weakening growth.
Companies that rely on immigrant workers can't find enough people. To bring demand down to match the reduced labor force they can supply, they raise the prices of what they produce. The result is the same as tariffs: weaker economic growth and higher inflation.
“the very heavy handed immigration policy, same result, weakens economic growth because many companies that rely on immigrant workers just can't get them, can't find those workers”at 35:07
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
AI investment is propping up US growth; without the AI boom the economy would look recessionary.
The economy looks good if you are in the AI ecosystem or own AI stocks: the total value of US public stocks has doubled in four years since ChatGPT, and the wealthy are outspending. Zandi says the overall narrative about the economy would be very different without the AI investment boom and the surge in AI stock prices. Without it, the economy would be pretty dark and the conversation would be about recession. He grades the AI economy A-plus and the non-AI economy around a D, which averages to about a B-minus, but that average misses how most people feel.
“The whole narrative about the economy would be very different today if not for AI... the narrative around the economy would be really pretty bleak. It'd be pretty dark. We'd be talking about recession.”at 35:37
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
Worsening economy for most Americans, blamed on Iran war and tariffs, points to a change in government.
Zandi argues the economy is tough for most Americans, not all, and has not improved; it is getting worse. He says voters are connecting the dots to the Iran war and tariffs as the drivers of what they are seeing. He concludes this strongly argues for a change in government at the coming election, with the House very likely and the Senate possibly flipping.
“So that would strongly argue that we'll see a change in government here on the other side of the election, certainly the house and very possibly the senate.”at 37:43
Prof G Markets: Anthropic's Q3 Results Are In — The Costs Are Exploding ·
The Iran war is driving inflation through energy costs and pass-through, with tariffs and immigration policy adding pressure.
Zandi says September's inflation of 3.7% is uncomfortably high, and the Iran war is the main driver. Higher energy and fuel costs flow directly from the war and pass through into the rest of the economy, feeding broader price pressures. Tariffs and immigration policy also add to inflation, but the war is the dominant force.
“The Iran war's fingerprints are all over it. Obviously, the higher energy fuel costs go directly to the war. And there's a lot of pass through going on into the rest of the economy”at 21:45
Prof G Markets: CoreWeave Is Imploding — And Taking AI Stocks Down With It ·
Tariffs and immigration policy were always going to slow growth and raise inflation, as economists expected.
Zandi says the current inflation outcome is not surprising. Before the April 2025 tariffs, he and most economists expected them to lead to slower growth and higher inflation. Immigration policy had the same effect, with slower growth and higher inflation. The Iran war fits the same pattern. The current state of the economy is the predictable result of these policies combined with the war.
“economists said, like me and almost everybody else, ... that tariffs are gonna lead to slower growth and higher inflation. Then the immigration policy, same deal, slower growth, higher inflation.”at 23:06
Prof G Markets: CoreWeave Is Imploding — And Taking AI Stocks Down With It ·
Real wages are falling as inflation outpaces nominal pay growth, so the labor market is soft, not at full employment.
Inflation is now consistently above wage growth, so purchasing power is declining. Zandi argues that if nominal wage growth, adjusted for inflation, is slowing, the labor market must be soft. With unemployment at 4.2%, he says the economy is not at full employment, which is a weaker position than the headline unemployment rate suggests.
“if nominal wage growth that's, you know, with inflation considered, is decelerating, that means that the labor market is on the soft side if we're not operating at full employment.”at 23:38
Prof G Markets: CoreWeave Is Imploding — And Taking AI Stocks Down With It ·
Spending is driven by stockholders; with real incomes falling and saving low, consumers will bend if stocks stall.
Zandi describes a K-shaped economy. Spending is led by well-to-do households that own stocks, and total US stock wealth roughly doubled in four years, from $35 trillion to $70 trillion, since ChatGPT launched. Roughly two-thirds of Americans own little stock or do not own their homes, and they are hanging on while real purchasing power declines. With saving rates near their lows, he expects the consumer to bend, especially if the stock market stops rising.
“So it feels like, you know, the consumer is gonna show, you know, a bit of a bend here, particularly if the stock market doesn't continue to move north.”at 25:30
Prof G Markets: CoreWeave Is Imploding — And Taking AI Stocks Down With It ·
The Iran war costs the average US household about $2,000 so far, a conservative estimate.
Zandi's estimate has three parts. The largest is higher energy costs, including gasoline, diesel, jet fuel and home heating. The second is higher interest rates: the 10-year Treasury yield was below 4% before the war began in late February and is now about 5.25%, which he attributes largely to the war. The third is military spending drawn from the Pentagon's instruments, paid by taxpayers. He says indirect costs such as higher fertilizer prices, which will feed into groceries, and higher helium prices, which raise semiconductor and electronics costs, are not included, so $2,000 per household is a conservative figure.
“we just hit $2,000 in extra costs related to the war, and that breaks down into three, broadly three things.”at 25:54
Prof G Markets: CoreWeave Is Imploding — And Taking AI Stocks Down With It ·
Raising rates won't solve war-driven inflation; the Fed should focus on the labor market, and he'd dissent.
Markets price close to a 50-50 chance of a Fed hike in October and a hike by December if not October. Zandi says the Fed is trying to stop war-driven inflation from becoming entrenched, but he argues the labor market deserves more weight, and he does not see how higher rates address inflation caused by the Iran war. He says he would probably dissent on the committee. Rate increases are the wrong tool here given the war-driven supply shock.
“I'd be more focused and put... At least put more weight on what's going on in the labor market going back to full employment. ... I don't quite understand how raising rates is gonna solve the problems of inflation created by the Iran war.”at 29:03
Prof G Markets: CoreWeave Is Imploding — And Taking AI Stocks Down With It ·
Despite strong headline numbers, the US economy is highly vulnerable and fragile.
Headline GDP, unemployment and the stock market look fine, but Zandi argues that real purchasing power is declining, which is hard to square with a healthy economy. Layoffs are low, which avoids a recession, but once people lose jobs they struggle to re-enter the labor market. House prices have been flat for three to four years, which matters because most Americans rely on their homes rather than stocks. These factors make the economy fragile.
“Well, it feels very vulnerable to me... just despite that, feels highly vulnerable, very fragile, I think would be the right word.”at 30:19
Prof G Markets: CoreWeave Is Imploding — And Taking AI Stocks Down With It ·
Shows
- Prof G Markets · 2 episodes
- CNBC Closing Bell · 1 episode
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