Iran war fallout raises odds of a U.S. recession, economists say

Economists are warning that escalating conflict in Iran could trigger a U.S. recession by driving up energy prices, which would ripple through consumer spending and business investment. Higher oil costs increase inflation pressures and squeeze household budgets at a time when Americans are already sensitive to gas prices at the pump. The concern reflects a broader economic vulnerability: energy shocks have historically preceded downturns, and markets are already pricing in geopolitical risk. The timing matters given current labor market conditions and Federal Reserve policy, which could amplify the impact of any energy-driven price surge. How the Trump administration responds to the Iran situation could significantly shape near-term economic outcomes.