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Oil price surge is the No. 1 threat to the US economy, Moody's economist warns

·1 min

The US jobs market and consumer spending remain strong, contributing to a briskly growing economy. However, the surge in oil prices poses a threat to this positive economic backdrop. US oil prices are approaching $90 a barrel, while global oil prices hover around $92 a barrel due to concerns of a wider conflict in the Middle East. This has resulted in gasoline prices reaching their highest level in five months. Rising oil prices could hurt consumer spending, impede progress on inflation, and potentially lead to a delay in interest rate cuts by the Federal Reserve. In addition, spiking gasoline prices above $4 a gallon could have significant political consequences. Despite energy market veterans maintaining their cautiously optimistic forecasts, the escalating risks associated with oil prices remain a concern.