Oil prices are rising, supply chains are straining and policymakers are proceeding with caution—but for now, the U.S. economy continues to hold its ground. Even amid the Iran War and the oil disruptions stemming from it, economists see only a modest risk of recession this year, according to a new survey from The Wall Street Journal.
The March 16–18 survey of 50 economists found that most expect inflation to rise temporarily while growth and unemployment remain largely stable—assuming the oil shock fades in the near term.
"Given the ongoing war in the Middle East, surging oil prices, high tariffs, AI and the severe constraints on immigration, it is worthwhile noting how resilient the U.S. economy has been so far," Bernard Baumohl of the Economic Outlook Group told the Journal.
"But we must not take this resilience for granted."
The economists placed the probability of a recession in the next 12 months at 32%, slightly above the 27% forecast in January. A sustained oil price spike, they said, could tip the balance. The average oil price expectation was $138 per barrel, with ranges varying from $90 to $200 and it would need to stay elevated for anywhere from four to 55 weeks, depending on respondents' assumptions—to materially raise recession odds.
"My forecast is contingent on the assumption that the Strait of Hormuz will be fully open to tanker traffic by mid-April," said Robert Fry of Robert Fry Economics, who currently puts the recession probability at 40% with oil hitting $125 for eight weeks.
"If it isn't, oil prices will go much higher, and I will put a recession in my forecast."
At the same time, the Federal Reserve is treading lightly. During its March meeting, policymakers kept interest rates steady, signaling that its next moves would depend on evolving conditions. Visibility is poor, and decisions will be made "meeting-to-meeting," Thomas Briney, president and chief investment officer of Origin Credit Advisers, told GlobeSt.com.
Fed Chair Jerome Powell noted that the economy is "expanding at a solid pace," though "activity in the housing sector has remained weak." Job gains "remained low," reflecting slowing labor demand and lower immigration and participation rates. The Federal Open Market Committee projected core inflation of 2.7% in 2026, an unemployment rate of 4.4% and GDP growth of 2.4%.
But the risks extend beyond oil. The Strait of Hormuz is also a conduit for pharmaceuticals from India, semiconductors from Asia and oil-derived products like fertilizers, according to The Associated Press. Disruptions there have already forced vessels to reroute in search of alternate ports—an ocean-bound game of musical chairs that could ripple through supply chains and, eventually, the broader economy.
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