Moody's Chief Economist: US Economic Recession Would Be Difficult to Avoid If Strait of Hormuz Blockade Continues

CycleProphet · 2026-03-17T08:51:13+00:00

Moody's Chief Economist Mark Zandi warned that a blockade of the Strait of Hormuz would deteriorate the U.S. economic outlook, with recession probability potentially exceeding 50%. Currently, the U.S. economy lacks post-pandemic support, employment is weak, GDP growth is sluggish, and investment banks generally predict recession probability between 30% and 40%.

CycleProphet

2026-03-17 08:51:13

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Deep Tide TechFlow News, March 17 — According to Jin10 Data, Moody’s, one of the three major credit rating agencies in the United States, Chief Economist Mark Zandi warned that as long as the Strait of Hormuz remains effectively blocked to oil tanker transportation, 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 difficult to avoid.

Zandi pointed out that before the outbreak of the Iran conflict, Moody’s leading indicators based on machine learning already showed a 49% probability of the U.S. entering a recession within the next 12 months, and the next data release is expected to reach or exceed 50%. He also 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 is different from 2022 — at that time, the U.S. was in a growth cycle driven by pandemic stimulus policies, providing 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 a GDP growth rate of only 0.7% in Q4 2025.

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.

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