Mark Zandi Predicts Accelerated Fed Rate Cuts Amid Job Market Weakness
Mark Zandi, chief economist at Moody's Analytics, forecasts three Federal Reserve rate cuts before June 2026—a more aggressive timeline than Wall Street or Fed officials anticipate. The prediction hinges on persistent labor market fragility, ambiguous inflation signals, and political pressures.
"Behind the decision to ease monetary policy further will be the still flagging job market, particularly in the early part of 2026," Zandi wrote. Businesses remain hesitant to hire due to trade policy volatility and immigration uncertainties, keeping job growth subdued and unemployment rising. This dynamic, he argues, will force the Fed's hand.
Futures markets currently price in just two cuts—likely in April and September—per CME FedWatch data. Zandi's outlook contrasts sharply with the Fed's own cautious DOT plot projections, suggesting deeper divisions on the economic trajectory.
