Zandi Says US Is ‘Uncomfortably Close' to Recession

• The US economy is 'uncomfortably close' to a recession, needing a resolution to rising oil prices within weeks.
• Gas prices hitting $5 a gallon (oil at $125/barrel) for 2-3 months would likely trigger a recession.
• Consumer confidence is down, and real disposable income is falling, putting pressure on households.
• Neither fiscal policy nor the Federal Reserve is expected to come to the rescue; the Fed would prioritize fighting inflation even if it leads to a recession.

Moody's Analytics Chief Economist Mark Zandi warns the US economy is 'uncomfortably close' to a recession, primarily driven by rising oil and gasoline prices. He states that if gas prices reach $5 a gallon (oil at $125/barrel) and stay there for a few months, it would push the fragile economy into contraction. Zandi believes neither fiscal policy nor the Federal Reserve would be able to effectively intervene to prevent a recession, as the Fed would prioritize controlling inflation.