Tags: Trump Administration | Trump | Recession | Moody | Economist | Zandi

Moody's Economist Zandi Changes Mind, Doesn't See Recession Due to Trump

Mark Zandi (Moody's Analytics)

By    |   Wednesday, 19 April 2017 07:51 AM

President Donald Trump isn’t the only one apparently flip-flopping and changing his mind.

Economist Mark Zandi predicted in June that if he were elected president, Trump's policies would kill economic growth, cause a “lengthy recession” and spark a surge in unemployment.

Zandi, of Moody's Analytics, recently admitted on CNBC that current conditions and data show an economy neither overheating nor displaying signs of financial weakness.

Trump's detractors, a camp in which Zandi was last year, are "overly pessimistic," he said.

Zandi and his team figured that the Republican's policies would result in 3.5 million fewer jobs and an unemployment rate that would zoom to 7 percent, CNBC.com explained.

However, Zandi's tone seemed to lighten in a new analysis issued Tuesday,

"The reality regarding the economy's performance is not nearly as good as Trump supporters believe nor as bad as claimed by Trump detractors," he wrote.

"Nothing much has changed for the economy since the election. It is expanding at the same pace as it has throughout its nearly eight-year expansion — real GDP growth of 2 percent and job growth of about 200,000 per month."

Zandi isn't alone in stepping back from original dire economic forecasts.

Fitch Ratings recently said that projections it made just a month or so ago for the U.S. economy under Trump were too dire. In February, Fitch warned that Trump posed a danger to global economic stability.

However, overall first-quarter growth numbers are not good. The Atlanta Federal Reserve estimates that gross domestic product (GDP) expanded just 0.5 percent during the period.

"Trump detractors who believe the new president will quickly drive the economy into a ditch are overly pessimistic," Zandi told CNBC. "Sustained economic growth is possible, but will require that Trump supporters and detractors find a way to work together."

However, he doesn't see signs of the recession he forecast in June. "There are budding imbalances today, of which we should be watchful, but none appear close to being an existential threat to the current expansion," he said.

Meanwhile, veteran financial guru and former Ronald Reagan adviser Larry Kudlow is urging any impatient investors to just give Trump a chance to fully enact his strategies to reform healthcare, spark economic growth and redesign the tax system.

After all, Trump has been in office a relatively short time and has inherited a mountain of problems from the past two decades. “He's trying to fix a lot of problems that have gone unfixed in the last 20 years,” Kudlow explained to CNBC.

Trump “still wants tax reform and healthcare reform. Those are big issues for him.” the Newsmax Finance Insider said. “He’s been in 80 days, give him a chance,” said Kudlow, who advised the Trump campaign on economic issues.

Meanwhile, many other respected economic voices are predicting robust growth and additional stock-market gains amid Trump's blueprint to truly "Make America Great Again."

David Horowitz, author of the best-selling book "Big Agenda: President Trump's Plan to Save America," told Newsmax TV that the market rally since Republican Donald Trump won the election has more room for gains as the president pushes his pro-business agenda.

“There's more upside. Starting from when he was president-elect he started this stock market boom,” he told Newsmax TV's “The Income Generation Show.” 

“There will be corrections. There are going to be setbacks along the way like the healthcare which they hurried too fast. If you're looking over the long term of this administration I think the stock market is going to love Trump,” Horowitz said.

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Economy
President Donald Trump isn't the only one apparently flip-flopping and changing his mind.
Trump, Recession, Moody, Economist, Zandi
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2017-51-19
Wednesday, 19 April 2017 07:51 AM
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