Mark Zandi
Mark Zandi
Mark Zandi is chief economist of Moody's Analytics, where he directs economic research. He is co-founder of Economy.com, which was acquired by Moody's Analytics in 2005. Prior to founding Economy.com, Zandi was a regional economist at Chase Econometrics...
NationalityAmerican
ProfessionEconomist
CountryUnited States of America
areas combined conditions country enjoying falling few less point result rising values wonderful
At some point you will get a combination of falling values combined with rising payments on adjustable mortgages, which will result in more bankruptcy. For these areas of the country that are enjoying such wonderful conditions right now, it will become much less wonderful a few years down the road.
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This is a similar point in the business cycle to when Greenspan took over the reins of the Fed. And of course he was tested right away with the 1987 stock market crash.
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Now, I do think when we move into 2012 and '13 when, presumably, the economy is on firmer ground, I would allow the tax rates for upper-income individuals to revert back to where they were before the cuts in the 1990s. I think at that point it makes perfect sense.
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The impact is going to be very significant -- it may shave as much as a half-percentage point from economic growth this year.
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A month ago the markets would have interpreted getting rid of measured as meaning that a 50 basis point hike was possible. Now the market won't know if it would mean no change, another quarter-point move, or a 50 point hike is next and that's precisely why the Fed should take it out,
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I think what we have in store is a slow deflating of the housing bubble, not a bursting of the bubble. But if mortgage rates rise more sharply than I am expecting, then the downturn in housing could be more severe.
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I think they will tighten, but there is a much higher level of uncertainty regarding this decision than at any one since they started over a year ago.
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I think the most likely scenario is that housing euphoria slowly deflates but doesn't burst.
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I think the message in this inverted yield curve is muddled. I think it is something to watch and to understand better. But I am not overly concerned.
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People are able to pull money out of their homes and put it into their gas tanks. So the overall effects on consumer spending have been small.
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We don't get away scot-free, but the underlying economy remains tough and sturdy.
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You are going to spend more to drive your car and to heat your home.
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It depends on your time frame. For the next few months, it's decidedly a negative event. But in a year or so, the effects will likely have faded.
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I thought oil would have been a concern since it hit $40 but the economy has digested it well,