WASHINGTON, DC — A leading economist is warning that a U.S. recession is increasingly likely as rising oil prices and global instability strain an already fragile economy. Moody’s Analytics chief economist Mark Zandi said recession odds were already near 49% before tensions with Iran escalated, calling the risk “uncomfortably high.”
Zandi noted that disruptions to oil shipments through the Strait of Hormuz — a critical route for global supply — have driven up energy costs, with gas prices rising roughly 80 cents per gallon since late February. He warned that sustained higher oil prices, even for several weeks, could push the economy past a tipping point.
Historically, nearly every recession since World War II has been preceded by a spike in oil prices, though Zandi acknowledged the U.S. is now more energy independent than in past decades. Still, he said consumers feel the impact quickly through higher fuel costs.
The White House has pushed back on recession concerns, with President Donald Trump and National Economic Council Director Kevin Hassett arguing the economy remains strong and price pressures will ease. Officials have also authorized the release of oil from strategic reserves to stabilize markets.
Other analysts suggest oil would need to rise significantly higher, potentially above $130 to $150 per barrel, to trigger a recession, though recent economic data shows slowing growth and a weakening labor market.
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