Trending Now - Economists Warn Iran Conflict Could Impact US Economy and Oil Prices

WHO:

Jeff Currie, Carlyle Group Inc.

Mark Zandi, Chief Economist at Moody's Analytics

Moody's, influential financial firm

WHAT:

Moody's reported a 49% probability of a US recession starting within the next 12 months before the Iran war.

The probability of a recession is now likely to exceed 50% due to high oil prices.

The US crude benchmark is currently trading at $94 per barrel.

Employment in February 2026 fell, with job reports showing downward revisions in 16 out of the last 19 reports by the US Bureau of Labor Statistics (BLS).

WHERE:

The Strait of Hormuz, which carries about one-fifth of the world’s oil.

WHEN:

The analysis and warnings were reported on March 18th, 2026.

The economic data has turned soft since the end of 2025.

WHY:

High oil prices are expected to hurt US consumers and lead to cautious spending.

Weak labor market numbers are contributing to increased recession odds.

HOW:

Moody's economic model is AI-based and has a strong historical record for predicting recessions.

Higher oil prices impact consumer spending more significantly than they encourage US oil producers to increase investment and production.

(UPDATED March 18, 2026 19:24 UTC)

Today, Moody's reported a probability of over 50% for a US recession within the next year, driven by high oil prices, which are currently at $94 per barrel. Employment numbers have also taken a hit, with the US Bureau of Labor Statistics showing downward revisions in 16 out of the last 19 job reports, indicating a softening labor market since late 2025. This analysis comes as tensions rise in the Strait of Hormuz, a critical passage for global oil, and suggests that consumers may face increased financial strain leading to more cautious spending.