Oil Shocks and Recession Risk: The Iran Conflict’s Economic Backdraft

Catherine Rampell argues the Iran war has sparked an energy shock that could slow growth and cost jobs: higher and more volatile oil and fuel prices reduce consumer spending, pushing the economy toward recession even if a downturn isn’t inevitable. Attacks on energy infrastructure threaten long‑term supply disruptions, and policy tools are constrained (rate cuts could worsen inflation, fiscal relief risks adding inflation), making a quick fix unlikely. The piece also notes other looming risks—like an AI bubble and private‑credit strains—that could amplify any downturn if they unfold, though none are guaranteed.