Investor Danny Moses is sounding the alarm over the market’s failure to account for the economic fallout from federal spending cuts. As the founder of Moses Ventures, he has a reputation for making prescient bets, including one against mortgage-backed securities before the 2008 financial crisis.
Moses warned that investors are underestimating the impact of these cuts and could be in for a shock when the economy begins to show signs of slowing down. The White House’s cost-cutting measures, spearheaded by Tesla CEO Elon Musk, have already led to the firing of over 25,000 federal probationary workers.
The Trump administration has labeled much of the federal spending as “wasteful” and “fraudulent,” but there is currently no publicly available evidence to support these claims. The recent tariffs imposed by Trump have also contributed to economic uncertainty, stoking recession fears.
Moses pointed out that the government’s debt-to-GDP ratio stands at over 120%, making it unsustainable if mistakes are made. He believes investors are being overly optimistic about how this will play out and warned of a potential market slowdown in first-quarter earnings reports.
As the economy begins to show signs of slowing, investors may be in for a surprise, highlighting the need for investors to carefully assess the risks and consequences of federal spending cuts on the economy.
Source: https://www.businessinsider.com/danny-moses-2008-crash-economy-risks-doge-federal-cuts-2025-3