Economists Slash US Growth Forecasts as Iran Conflict Fuels Inflation and Recession Fears

The U.S. economic outlook deteriorated sharply in early April following military operations in Iran, prompting economists to slash growth forecasts and raise inflation projections, according to an emergency National Association for Business Economics (NABE) survey released on April 3, 2026. Nearly two-thirds of respondents lowered 2026-2027 GDP estimates by 0.25 to 0.5 percentage points, while core inflation projections rose by 0.25 percentage points above the prior 2.7% baseline. The probability of a recession jumped to approximately 50% from a typical 15%, driven by retail gasoline prices exceeding $4 per gallon. Federal Reserve policy expectations fractured evenly among zero, one, or two rate cuts for the year, with central bank officials maintaining a hold stance amid rising stagflation risks.