The stock market is underestimating the harm a coronavirus pandemic would cause both the economy and President Donald Trump's re-election chances, Moody’s Analytics chief economist Mark Zandi told CNBC’s “Trading Nation” over the weekend.
Trump “can’t seem to get on the same page with the experts, the CDC,” Zandi said. “This is a significant threat to his re-election.”
Zandi, warned that “They’re at least even odds,” of a recession happening. “If you take the most likely scenario and the CDC is roughly right, then it’s pretty hard to avoid one.”
Last week the stock market had it worst week since the 2008 financial crisis, with the Dow Jones Industrial Average suffering its biggest weekly point decline ever.
But Zandi, who even before the coronavirus crisis warned of a correction, emphjasized that Wall Street is very much underestimating the magnitude of a recession.
“The general thinking at the moment is V-shaped - that this is a problem here and now. The Fed eases monetary policy, and we’re back up and running pretty quickly. I suspect that won’t be the case,” he said. “The Federal Reserve does not have a lot of room to maneuver... I don’t think policy is up to the task to really juice up this economy to get it going again quickly.”
He stressed that “Valuations were very stretched. Anything probably would have pushed the stock market back on its heels. COVID-19 [coronavirus] is more than just something, and that is something very substantive.”
Brian Freeman ✉
Brian Freeman, a Newsmax writer based in Israel, has more than three decades writing and editing about culture and politics for newspapers, online and television.
© 2025 Newsmax. All rights reserved.