Episode #292
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On the Market 285 - Bond “Vigilantes” Hold Interest Rates Hostage as Rate Cut Hopes Shrink:
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With evidence of a global recession piling up, Americans have just one question—will we be affected? So far, everything is going well for the US. Job growth continues, unemployment is low, and asset prices are high, but with the global economy becoming increasingly interlinked, could a crash in Europe or Asia pull us down with them? Mark Zandi, Chief Economist of Moody's Analytics, has a contrarian viewpoint that defies the masses.
But Mark has bigger worries than a global recession taking down the US economy. We could be our own worst enemy as “tinder” for an interest rate fire begins to pile up, and the bond market may be more than ready to light it. Even with President Trump’s push for lower interest rates and the Fed pausing rate cuts, could we see mortgage rates fly up higher, defying the system meant to keep them in check?
Plus, what does DeepSeek’s entry into the AI race mean for the US economy? Could this cheaper, sleeker AI bring serious competition not only to the US AI market but also to chip manufacturers whose stock prices have been carrying the market to record highs? It’s a lot to unpack, but Mark does a phenomenal job laying it all out.
00:00 Intro
00:44 An “Exceptional” Economy, But…
04:53 Tariffs Could Cost Us
08:13 Why America is Winning
10:46 Global Recession?
12:44 Massive Interest Rate Risk
20:23 Could Home Prices Fall?
23:30 DeepSeek Changes AI Race