It’s never a good sign when an economist has to apologize before giving a presentation on the outlook for the U.S. economy.

But Mark Zandi did.

After taking a hotel ballroom stage in downtown Nashville on Monday at the start of NIC’s Spring Conference, the renowned longtime voice of the Moody’s rating agency tried to separate the positive long-term outlook for the seniors housing sector from what he called a dark forecast for the general economy in the immediate term.

Iran. Tariffs. Inflation. Job doldrums. Fiscal cliff(s) plural. Pick your poison, Zandi said. And anchoring these many problems is the manifestly unique nature of the current leadership in Washington, DC, which has left economists and most others in the business world plain confused and uncertain about the direction things are headed.

He said the question is the “choices we are making” as a country, versus directly criticizing the man in the White House, and those choices have wrought a dangerously high spike in oil prices to more than $100 a barrel due to the five-week-old Iran conflict from what were prices around $60 a barrel, and before that an uneven and fruitless tariff policy.

“Every 10 dollars of a rise in oil equates to a rise of 25 cents a gallon for gasoline,” Zandi said, one of many economic data truisms that all seem to be pointing in a negative direction of late.

And the dark part is that if the status quo in oil prices is the same a month from now, the odds of the country going into a full-fledged recession are “very high.”

Inflation, Inflation, Inflation

The uncertainty of what will happen with the fighting could, Zandi said, cause a recession because of a version of “stagflation” where growth slows, interest rates rise, and inflation veers well above the Federal Reserve target.

But, he said, the 2026 stagflation won’t look like the kind that plagued the U.S. economy in the 1970s, it’s a different country now, but that doesn’t mean it will be any less pleasant.

As for inflation, Zandi said oil prices spiking is a lever to reignite high inflation because not only energy-related products, but also because there are other key goods tied to the Middle East, more than most people realize. Helium is affected, for instance, a key component in the production of chips used for computer production and artificial intelligence processing. Qatar is a huge helium market and is at times under attack from Iran and or not access of trade routes out of the region like the Strait of Hormuz.

Bahrain makes aluminum used for aircraft manufacturing and wind turbines, for instance, he added. So, while the U.S. inflation rate is around 3 percent now, the expectation from the OECD is for that number to rise to 4.2 percent this year because of the Middle East turmoil and existing pressures that are apparent to most Americans in grocery store prices, which has continued to create “sticker shock” to consumers.

Zandi noted that the Federal Reserve inflation target remains at 2 percent.

What About Seniors Housing?

When speaking about seniors housing, the overflow crowd heard better news, even if most of the positive comments focused on the calendar year 2027 and not 2026.

Zandi said the current woes in the general economy are not separate from the market for building much-needed housing for seniors. Even before Iran, the rate of construction for seniors housing was under pressure from construction costs, finding labor to build the housing, and a risky business climate put into a sort of frozen state by tariffs.

“There are 560,000 senior housing homes needed by 2030, and at the best we can come up with is 190,000 [at the current pace],” he said.

But Zandi said the demographic “tailwinds” for investing in seniors housing is apparent with the aging baby boomers who have wealth from their own investments in housing and equity markets.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.