Moody's Chief Economist: Continued Blockade of the Strait of Hormuz Would Make US Economic Recession Inevitable

Gate News reports that on March 17, Moody’s Chief Economist Mark Zandi warned that as long as the Strait of Hormuz remains blocked to oil tanker traffic, the U.S. economy will continue to deteriorate; if the situation does not change within a few weeks, a recession in the U.S. will be unavoidable. Zandi pointed out that before the Iran conflict erupted, Moody’s leading indicators based on machine learning showed a 49% chance of a U.S. recession within the next 12 months, and the next data release is expected to reach or exceed 50%. He emphasized that since World War II, every recession (except during the COVID-19 pandemic) has been preceded by a surge in oil prices. The current situation differs from 2022—at that time, the U.S. was in a growth cycle driven by post-pandemic stimulus policies, which provided a buffer for the Federal Reserve’s rapid rate hikes; now, the U.S. economy no longer has this support, with weak employment data and Q4 2025 GDP growth at only 0.7%. Currently, several investment banks still estimate the recession probability between 30% and 40%, and the Yardi research team recently raised the market crash probability from 20% to 35%. The S&P 500 index rose 1% on Monday, closing at 6,699.38 points, and Wall Street as a whole has not yet priced in a recession.