The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.

Macro Economy•29 June 2026•

1 min read

Zandi Warns US Economy Flashing Yellow Flares on Consumer Front

Key Facts

1Mark Zandi, chief economist at Moody's Analytics, warns that the US economy is flashing 'yellow flares' as weak consumer spending, falling income, and low savings persist despite 2% growth and an AI boom.

As the AI boom continues to drive US economic growth, Mark Zandi, chief economist at Moody's Analytics, warns of 'yellow flares' on the consumer front. Zandi points to weak consumer spending, declining income, and shrinking savings, according to a report by Benzinga. This comes despite GDP growing at 2% and surging AI-related investment.

The warning follows recent data reflecting persistent consumer headwinds. According to market data, the average 30-year mortgage rate rose to 6.59% on June 24, while the US Services PMI posted a modest 51.3 reading on June 23. These figures indicate that consumer spending power remains under pressure, particularly in interest-rate-sensitive sectors.

Investors are now weighing whether the consumer weakness will influence the Federal Reserve's monetary policy path. Attention is on upcoming Fed speeches, especially after Governor Waller's address on June 22, which may offer clues on rate-cut timing. The key question remains whether the economy can sustain its expansion as household financial buffers erode.