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Federal Reserve · Inflation · Oil Prices · Recession Risk
Economists surveyed by the Wall Street Journal indicate that crude oil prices must reach approximately $138 a barrel and sustain that level for several weeks to elevate the U.S. recession risk above 50% following Iran's Strait of Hormuz blockade.
The survey of 50 economists reveals a 32% chance of recession in the next 12 months, an increase from 27% in January. Current Brent crude trades at $105 a barrel, with West Texas Intermediate at $96, driven by the largest-ever energy supply disruption.
Economists expect this temporary supply shock will boost inflation, with the Consumer Price Index forecast to hit 2.9% in December, up from an earlier 2.6% projection. The Federal Reserve maintained interest rates at 3.5% to 3.75%, with Chairman Jerome Powell acknowledging heightened uncertainty from the Iran conflict.
Despite these challenges, the U.S. economy has demonstrated resilience, though experts like Bernard Baumohl of the Economic Outlook Group caution against taking this for granted. Robert Fry, chief economist at Robert Fry Economics, projects a 40% recession chance, contingent on the Strait of Hormuz reopening by mid-April.
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Economists: $138 Oil Price Triggers Recession Risk(current)
