Interview Only w/ Mark Zandi - Trump’s Policies Have Been Disastrous For The American Economy

**Chuck Todd** (0:00)
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Well, for our regular return engagement, I've got the chief economist for Moody's with me today, Mark Zandi. And Mark, we are taping, it is Wednesday in the AM East Coast time. I always like to timestamp this.
The President of the United States is about to land in China, about to start a three day visit in China, which will play a huge impact on the economy. But look, I invited you on before the big inflation report. And then I'm like, wow, thank God I invited Mark Zandi on this week after this big inflation report. So let's start there.

**Mark Zandi** (2:12)
Yeah.

**Chuck Todd** (2:14)
Any sugar coating this?

**Mark Zandi** (2:16)
No, you're talking about the producer price index. We got CPI yesterday, which was pretty ugly. This was this PPI is wholesale.

**Chuck Todd** (2:25)
Which is which matters more to you?

**Mark Zandi** (2:28)
Well, I'm an economist, it all matters to me.

**Chuck Todd** (2:30)
All of it's in a data point.

**Mark Zandi** (2:32)
But I think most people are focused on the CPI, the consumer price index, because that's what reflects prices for goods and services that they're paying for out of pocket. So that's what they feel. PPI is one step, big step back. That's what businesses are charging each other effectively, that ultimately get passed through to consumers in the CPI. But people feel the CPI more than the PPI. But the CPI yesterday, that was ugly.
The PPI is uglier. It was just really bad. We knew it was going to be up a lot because of the energy prices, the war and everything else, tariffs. But it was more than double what I thought the increase would be.

**Chuck Todd** (3:16)
And everything I've read says that this stuff's lagging indicator.

**Mark Zandi** (3:22)
Lagging in what sense?

**Chuck Todd** (3:24)
That it's only getting, that this is, if you're looking backwards, things are probably still headed in the wrong direction.

**Mark Zandi** (3:31)
Oh, yeah, absolutely. The trend lines here look ugly, and the trend lines look really ugly. Yeah, good word. Forward, yeah. I mean, we've got a lot of pass-through that still happened related to the energy price effects. So far, all we've observed or seen or felt is the direct effects of the higher oil prices. We're paying more at the gas pump. We're starting to pay more for airfares. But now, it's flowing through and you're starting to feel it in grocery prices simply because a big part of food costs is transporting the product from the farm or the port. Yeah, diesel.
Then you're seeing it in transportation costs. So yeah, the pass-through here is going to continue.
Even if the war ended today and oil prices started to come in, we're going to be feeling this for quite some time, at least for the summer months into the rest of the year.

**Chuck Todd** (4:24)
At one point on Tuesday before the president left, he claimed before the war started that the inflation rate had gone down below two.

**Mark Zandi** (4:31)
I heard that.

**Chuck Todd** (4:32)
Yeah.
Did I miss something? I don't think I ever... I mean, we had been pushing it down and then tariffs sort of... Instead of me saying it, you tell me, since he took office, what's the inflation rate been doing?