KQED's Forum Is Another ‘Great Recession’ on the Horizon?
Mar 25, 2026
Claudia Somm, a macroeconomist and former policy director, and Talman Joseph Smith, an economics reporter at The New York Times, discuss how the Iran war and oil shocks raise recession risks. They examine AI and social media’s role in shaping war coverage. They also cover labor-market fragility, consumer behavior, and what policymakers can and cannot fix.
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Leaders Can Jawbone Markets To Shape Conflict Impact
- Presidents can intentionally use public statements to shape market prices, delaying market adjustments during conflicts.
- Talman Joseph Smith described Trump’s “jawboning” that scaled back attacks to time market reactions around trading days and closes.
Oil Price Shocks Ripple Through Core Inflation
- Oil is a broad input whose price surge feeds inflation across many sectors beyond gasoline.
- Talman Joseph Smith listed airline fares, transportation, fertilizers, and plastics as channels that transmit oil shocks into headline and then core inflation.
Financial Prices Can Diverge From Physical Oil Reality
- Financial markets can mask physical shortages by pricing optimism, delaying a painful convergence with physical reality.
- Talman Joseph Smith warned that jawboning keeps financial prices low now but eventual physical shortages could create a much worse shock later.