Chuck Todd opens by previewing Mark Zandi's sobering economic forecast from this episode and arrives at a simple, devastating conclusion: every single policy decision Trump has made has made the economy worse, tax refunds have already been gobbled up by inflation, and the math guarantees voters will feel even worse by the midterms — meaning Republicans on the ballot should be furious with the president, and those in swing districts have no choice but to start distancing themselves from his policies now. But the real heat in this episode comes from his analysis of Trump's trip to Beijing to meet Xi Jinping, which he frames as the diplomatic equivalent of going hat in hand. He argues there's simply no winning a trade war with China, that scrapping the TPP and the JCPOA will go down as two of the most colossal strategic mistakes of the modern era, and that Trump's combined Iran and China policies have somehow managed to strengthen both adversaries simultaneously — to the point that his foreign policy decisions are starting to make him look, in Chuck’s words, like a Manchurian candidate. The world is now beginning to view the United States itself as the global boogeyman, and Trump's presidency is doing damage to America's long-term standing that will take a generation to repair. The brutal irony, he notes, is that Trump now needs more from China than China needs from America: China is the only country with real leverage over Iran, defenders of Taiwanese independence are quietly terrified that Trump could trade them away for an economic off-ramp, and Xi gets to sit across the table from a desperate American president whose negotiating position keeps eroding by the day.
Then, Mark Zandi — chief economist at Moody's Analytics and one of the most quoted forecasters in America — joins the Chuck Toddcast to deliver a remarkably sobering verdict on where the economy actually stands: without the $700 billion currently being poured into AI investment, the United States would already be in or close to recession. The latest CPI and PPI reports came back ugly and uglier, oil shocks from the Iran war will keep prices elevated through 2027 even if the war ended tomorrow (Zandi says don't expect $3 gas again until then), real disposable income has been flat or falling for a year, FHA mortgage delinquencies are at their highest level since the Great Recession, and the bottom 40% of earners are living genuinely paycheck to paycheck. Zandi pushes back on lazy comparisons to the 1970s — conditions were objectively worse then, with a self-reinforcing wage-price loop that took a brutal recession to break — but warns that nominating Kevin Warsh as Fed chair specifically to cut rates would risk replaying exactly that movie, and that a policy of low rates at any cost would be catastrophic.
The deeper diagnosis is brutal: employment was growing steadily and inflation was easing until Liberation Day, when both reversed simultaneously — meaning Trump's tariffs are the most obvious thing to cut, and the question of who actually benefits from them gets harder to answer every month. The mass deportation policy is costing the country roughly 0.5-0.7% of GDP growth that normal immigration would have provided, with agriculture, construction, hospitality and services taking direct hits. Zandi sees economic weakness most pronounced in the South and West, healthcare-anchored cities like Philadelphia outperforming Florida and Texas, and a national debt now exceeding GDP that's setting the conditions for a potential bond market sell-off — with global investors already being advised to diversify away from the dollar as America deglobalizes and the world quietly pulls away. His most striking observation: the fixes are all sitting on the shelf. America doesn't need new ideas to solve any of this — it needs the political will to use the ones we already have, and that will probably won't materialize until a genuine crisis forces it. By the midterms, voters will be feeling the worst of it, and while partisan media can try to spin the numbers all it wants — reality is much harder to spin.
Finally, Chuck answers listeners’ questions in the “Ask Chuck” segment.
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Timeline:
(Timestamps may vary based on advertisements)
00:00 Chuck Todd’s introduction
01:00 Mark Zandi paints a sobering picture about state of the economy
02:30 Every Trump policy decision has made has made the economy worse
03:45 Tax refunds have been gobbled up by inflation
04:15 The economy will only feel worse to people by midterm elections
06:30 Republicans on the ballot should be furious with Trump
07:15 Republicans in swing areas have to distance from Trump policies
08:15 Trump in China to meet with Xi Jinping
09:00 There’s no winning a trade war with China
10:30 Getting rid of the TPP & JCPOA were colossal mistakes
11:30 Trump is losing the Iran war and strengthened Iran & China
12:00 Trump’s policies make him look like a Manchurian candidate
12:30 The world is now starting to view the US as the boogeyman
13:15 Trump’s presidency has been terribly damaging long term to the US
14:30 We need more from China than they need from us
15:00 China is the only country that could lean on Iran
15:45 Defenders of Taiwan independence worried Trump could cave
16:45 Trump is desperate for Xi’s help
21:00 Mark Zandi joins the Chuck ToddCast
21:45 CPI inflation and PPI inflation reports came back ugly & uglier
23:00 The through lines are ugly and going to get worse due to oil prices
23:45 Even if the war ended today, higher prices would last all year
24:15 Inflation has been accelerating under Trump, was on track under Biden
25:15 Inflation was worse during Covid combined with start of Ukraine war
28:00 Economy and stagflation were much worse in the 70s than now
28:45 Conditions different from 70s, there was a self-reinforcing loop in 70s
29:30 The only way out of 70s stagflation was a very severe recession
30:15 Kevin Warsh nominated for Fed chair to lower interest rates
31:00 If Warsh cuts interest rates, we risk a repeat of the 70s
31:45 A policy of low rates at any cost would be catastrophic
32:15 Rate cuts won’t happen since they are set by a board
32:45 Economy won’t have time to recover in time for the midterm elections
34:00 Partisan media can try to spin the economy, but reality is hard to spin
35:15 We won’t be back to $3/gallon gas until 2027 most likely
35:45 Last 3 months, the economy got a boost due to tax refunds that are fading
37:00 Real disposable income has fallen or stayed stagnant the past year
37:45 Bottom 40% earners are struggling badly, living paycheck to paycheck
38:45 FHA mortgage delinquency rates are rising, highest since great recession
40:00 Things will feel worse economically by the midterm election
41:30 Without $700B in AI investment, we’d be close to, or in a recession
43:45 Last two jobs reports better than expected, tax cuts acted as stimulus
44:30 The job market is still very weak
45:30 With normal immigration we’d grow GDP by 0.5-0.7%, and lost that
46:30 Data shows immigrants don’t take jobs native born workers have
47:30 Lack of immigrants will hit state & local government budgets hard
48:15 Agriculture, construction, hospitality and services hit hard by deportations
50:00 Air travel hasn’t fallen off due to economic conditions… yet
50:45 High end consumer spending on recreation hasn’t fallen off at all
51:45 Is the proposal to cap credit card interest rate at 10% a good idea?
52:30 Companies won’t offer credit lines to consumers without great credit scores
53:15 Trump cutting the tariffs is the most obvious solution to higher prices
54:00 Employment was increasing regularly until Liberation Day tariffs
54:30 Inflation also took off on Liberation Day
55:15 Who actually benefits from Trump’s tariffs?
56:30 Suspending gas tax would result in .10-.15c lower prices at pump
58:30 Cutting the gas tax likely won’t result in any political benefit
1:00:00 Economic weakness most pronounced in the south & the west
1:02:00 Cities with big healthcare industries having most job growth, Philly leading
1:03:45 Pennsylvania economy rowing faster than Florida or Texas
1:04:15 America’s national debt exceeds GDP, how concerned should we be?
1:06:30 Indicators show we having a massive debt and deficit problem
1:08:00 The conditions for a sell off in the bond market are in place
1:08:30 It’s going to take a crisis to generate political will to act on the debt
1:09:45 America is deglobalizing, and world pulling away from us
1:10:15 Investors being advised to diversify away from the dollar
1:11:30 The fixes to the economy are all sitting on the shelf. Don’t need new ideas
1:13:00 AI job displacement hasn’t hit hard yet, but could be coming soon
1:16:15 Need a stiff drink after the interview with Mark Zandi
1:16:45 Ask Chuck
1:17:00 Alternative idea for formula to expand the house of representatives?
1:21:45 Will there be any impact from Susan Collins disclosing her tremors?
1:25:30 Thanks for interview with lawyers suing big tech, screen time is down
1:26:45 Could you argue that SCOTUS striking down New Deal policy was most impactful?
1:28:45 Is Dems gerrymandering more about deterrence and not pure hypocrisy?
1:33:15 If a justice steps down, who would Trump nominate. What would impacts be?
1:37:45 Thanks for the pod. It’s helped me get through long dialysis sessions
1:39:15 NBA playoffs reaction
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