All articles tagged with #moodys analytics
US defense chief Pete Hegseth says the Iran war has cost about $37.5 billion to date as he and Joint Chiefs Chair Dan Caine push for a $1.5 trillion defense budget, including roughly $70 billion for the Iran conflict; Moody’s Analytics estimates domestic costs could reach $150 billion, while critics question funding amid ongoing strikes and a collapsed MoU.
Moody’s Analytics chief economist Mark Zandi says US recession risk is rising and could be triggered if oil averages about $125 per barrel in Q2; their simulations identify that level as a plausible tipping point amid Iran tensions and a weak labor market. Although not predicting an outright downturn in their baseline outlook, higher oil prices have shaved roughly 15–20 basis points from 2026 real GDP growth, and their April forecast expects a further rise in oil prices that would weigh on growth and push recession probabilities higher.
Moody's Analytics warns that the US economy is nearing a recession threshold, with the unemployment rate rising to 4.6% and the Sahm Rule close to triggering a recession signal, amid weak job growth, declining demand, and potential impacts from AI and policy factors.
The US economy is on the brink of recession, with California and New York playing a crucial role in its future trajectory. Nearly one-third of states are in or at high risk of recession, while the overall economic growth remains fragile amid trade tensions, inflation, and a weakening labor market. The economic outlook hinges on these two large states, which could tip the national economy into a downturn or help it avoid one.
Mark Zandi, chief economist at Moody's Analytics, warns that the US economy is on the verge of a recession due to weakening consumer spending, rising inflation, and the impacts of tariffs and immigration policies, with rate cuts unlikely to prevent a downturn.
Hurricane Idalia is estimated to have caused between $12 billion and $20 billion in damage and lost output, according to Moody's Analytics. While the price tag is significant, it is considerably lower than other major hurricanes due to the storm's relatively fast speed and its landfall in Florida's Big Bend, an area with fewer people and lower property values. Moody's warns that as climate change leads to more frequent and intense storms, events like Hurricane Idalia will become more common in the future. Official estimates of insured losses will be released by Moody's RMS in the coming weeks.
Moody's Analytics predicts that a prolonged breach of the US debt ceiling could lead to the destruction of over 7 million jobs, a severe recession, and a plunge in GDP and stock prices. Even a brief debt default could cause significant damage to the economy, with GDP sliding by 0.5% and unemployment increasing by 1 million Americans. Treasury Secretary Janet Yellen warns that the country will run out of cash to pay its debts in early June. The White House is hosting near-daily talks with Republicans to strike a budget agreement before the pivotal June deadline.
Economist Mark Zandi of Moody's Analytics warns that if the US defaults on its debt, it could lead to suspension of Social Security checks or a loss of food stamp benefits, and potentially tip the country into a recession, creating global turmoil. While he believes that lawmakers will reach an agreement, he notes that the politics are different this time, and there is a nonzero probability that lawmakers make a mistake and breach the debt limit. Zandi also expresses concern that there is not enough pressure being applied to the feet of the people on Capitol Hill to reach a deal.
Moody's Analytics chief economist Mark Zandi warns that if the US Treasury defaults, it could have broad economic consequences, with the housing market being one of the most vulnerable areas. Financial markets would put upward pressure on long-term rates like mortgage rates, which could go back above 7% if a default looked likely. This would accelerate the ongoing housing market correction, which lost some momentum this spring. Zillow predicts that if the US were to default, the average 30-year fixed mortgage rate would spike to a peak of 8.4% by September, while home sales volumes would fall 23%.
Moody's Analytics chief economist Mark Zandi said that most state economies will be hit hard if there is a debt limit breach, although the economic pain varies. Washington, D.C., where 1 in 4 jobs are tied to the federal government, would be hardest hit, becoming the "poster child" for a financial disaster. States with large federal facilities, such as national laboratories or military bases, would be next in line. Even a short debt ceiling breach, in which the government defaults for less than a week before lawmakers raise the government's borrowing limit, would likely push the economy into a recession, according to Moody's.
Failure to reach an agreement on raising the US debt ceiling could lead to a global downturn, undermine US global economic leadership, and raise questions about national security interests, warns Treasury Secretary Janet Yellen. The US has hit the $31.4tn debt ceiling set by Congress, and without an agreement, experts project a default could happen as early as June 1. The impact could cause stocks to plummet, send the US into a recession, and damage the economy in unforeseen ways. Moody's Analytics economist Bernard Yaros Jr. puts the probability of a default at about 10%, but warns that if it lasts longer than a few days, the impacts on the US financial system could be far-reaching.
Lawmakers return to Washington facing a fast-approaching deadline to address the debt limit or risk an unprecedented default. The US reached its $31.4 trillion borrowing limit back in January and is now relying on "extraordinary measures" to keep the government fully funded. The "X-date" when those measures will run out is a moving target, but experts predict it could happen as early as this summer. House Republicans have demanded spending cuts in exchange for lifting the debt ceiling, while Democrats are calling for a "clean" raise without conditions. If no resolution is reached before the "X-date," the US could default for the first time in history, which would have catastrophic economic consequences.
Zillow and Moody's Analytics have issued contrasting forecasts for the US housing market. Zillow expects US home values to rise 0.5% between January 2023 and January 2024, with 238 of the 400 largest housing markets expected to see positive growth. Moody's Analytics, however, expects US home prices to fall 4.2% between December 2022 and December 2023, with 98% of major markets expected to post a home price decline over the coming year. Moody's expects home prices to continue falling as they are too far detached from underlying fundamentals like incomes.