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.

Try ShipStation free for 60 days with full access to all features, No credit card needed! Go to https://ShipStation.com and use code TODDCAST for 60 days for free!

Thank you Wildgrain for sponsoring. Visit http://wildgrain.com/TODDCAST and use the code "TODDCAST" at checkout to receive $30 off your first box PLUS free Croissants for life!

Link in bio or go to https://getsoul.com & enter code TODDCAST for 30% off your first order.

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