Overview
- Iran’s conflict-linked jump in oil prices has reopened debate over the risk of stagflation in the United States.
- Raymond James chief economist Eugenio Aleman calls the chance of full stagflation very low and estimates a 35%–40% probability of recession.
- EY-Parthenon’s Gregory Daco says inflation pressures are building now and warns a severe, prolonged supply shock could tip the economy into stagflation.
- March data from the University of Michigan show the conflict erased recent gains in consumer sentiment, underscoring household vulnerability.
- Advisers recommend bolstering cash reserves, diversifying globally and using TIPS, while some analysts argue 1970s-style parallels are overstated.