Kathmandu. U.S. President Donald Trump’s tariffs have sparked a global trade war. Trump has seen tariffs as a tool to boost the country’s revenues, but they have also had the opposite effect.
Many economists have long warned that the US is on the brink of a recession. Now Moody’s has issued a stern warning. Moody’s Analytics has said that only two states can determine whether the US will face a recession.
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According to Mark Zandi, chief economist at Moody’s Analytics, New York and California could be the line between a stable US economy and a full-blown recession. It’s worth noting that Zandi himself has been warning for months that the U.S. is on the brink of a recession. “The financial health of these two large public economies can make or break the balance,” he says. ’
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“Both New York and California are facing a level playing field,” Mark Zandi said. They are facing significant obstacles to development. But they’re also dealing with some strong tailwinds.
According to a new analysis by Zandi, both states appear to be treading water. Other states have already entered a local recession.
Highlighting the main concerns, Zandi said, “Both states are very dependent on globalization and free trade. However, they face structural challenges, including rising tariffs and tougher immigration policies, as well as a broader trend of untrustworthiness. ’
In an interview with Business Insider, Zandi said that both states are grappling with challenges posed by high Trump tariffs and overly restrictive immigration policies. But both are also benefiting from AI investments and the rise in the stock market, which is driving up consumer spending for high-income households. ’
All eyes are on New York and California
According to Zandi, California’s tech sector is at risk of staff cuts. This poses a potential risk to the job market. However, he says other sectors such as health care and education are filling the gap to some extent. ’
Moody’s economists had said in August that the US was on the brink of a recession and that the situation would worsen by September. Now all eyes are on New York and California.
Inflation in the U.S. is high
Retail inflation remained high in September, driven by rising prices of some U.S. imports. According to the latest inflation data released by the US Labor Department, consumer prices rose 3% in September from a year earlier. Which was less than expected. But that was higher than the 2.9 percent increase in August last year.
