Mark Zandi, the chief economist at Moody's Analytics, said that the United States is uncomfortably close to a recession [1, 2].
The warning highlights a growing fragility in the U.S. economy, suggesting that a combination of geopolitical conflict and domestic labor trends could trigger a contraction.
Speaking during a Bloomberg Television interview on March 12, 2025, Zandi identified several critical pressures on the economy [1, 3]. He said the ongoing war with Iran and the resulting rise in oil and gasoline prices are primary threats [1, 2]. According to Zandi, these factors combined with a weakening job market have left the economy vulnerable [1, 2].
Zandi said that the likelihood of a downturn increases if current geopolitical tensions persist. "If the war with Iran continues, the likelihood of a recession becomes more than likely," Zandi said [1].
Beyond external shocks, Zandi pointed to a lack of available policy levers to stop a slide. He said that the Federal Reserve, Congress, and the administration may lack the capacity or will to intervene [1]. "The Federal Reserve may not be in a position to rescue the economy, and I don’t see Congress or the administration stepping in either," Zandi said [1].
This outlook contrasts with other industry perspectives. While Zandi describes the U.S. as being on the brink of a recession, the CEO of Chevron said to CNBC that there are no signs the U.S. is close to such a downturn [4].
Zandi said that the synergy of high energy costs and a declining job market creates a precarious environment where the traditional tools of economic rescue are no longer effective [1, 2].
“The risk of a recession is uncomfortably high.”
Zandi's assessment suggests that the U.S. economy has lost its 'buffer' against external shocks. If energy prices spike due to conflict while the labor market cools, the government may be unable to use fiscal or monetary stimulus to prevent a recession without risking further instability, such as inflation.
