Oil price surge is the No. 1 threat to the US economy, Moody’s economist warns
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Surging oil prices pose the most serious threat to the US economy, according to Moody's chief economist Mark Zandi. US oil prices are approaching $90 a barrel, while global oil prices are flirting with $92 a barrel. Higher oil prices could hurt consumer spending, impact inflation, and potentially delay interest rate cuts by the Federal Reserve. If gasoline prices spike above $4 a gallon and stay there, it could have significant political consequences, potentially favoring former President Donald Trump in the November election. The recent oil price rally has been driven by geopolitical tensions, including drone attacks on oil refineries and fears of a wider conflict in the Middle East. Gas prices have climbed to $3.58 a gallon on average nationally. The higher gas prices go, the worse inflation readings will look, potentially affecting the Fed's decision on interest rate cuts in June. Despite the risks, some energy market veterans remain cautiously optimistic about gas prices, with forecasts in the upper-$3 range unless a major hurricane damages US refineries.

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