The Iran conflict is still front of mind for everyone, including the oil market, and we have our first assessments on whether this increases recession risk. We’re hearing about stagflation, but by one estimate this is more of a problem for Europe than the U.S. CEO’s had some interesting things to say about AI and jobs, and you’re going to need some help planning for long-term care costs. Locally, our economy is basically flat but there are winners and losers.
This Week’s Takeaways:
- Even thought the U.S. can better weather high oil prices than other countries, a sustained uptick could offset the benefits from last year’s tax package and oil staying at $130/barrel could swing us into recession.
- We’re hearing about stagflation, but sharply higher energy prices put the European economy at greater risk of it than the U.S.
- Long‑term care is a highly uneven but potentially catastrophic expense, and planning should focus less on the “average” cost and more on the range of outcomes by gender, health, state, and whether risk is pooled through insurance.
- According to a survey of CEO’s, AI is more likely to reshape jobs and create new opportunities than trigger mass layoffs, but it will reward companies (and workers) that adapt their processes and security fastest rather than those simply spending the most on flashy tools.
- The typical homeowner has stayed in their home for 12 years as of December, almost double the median tenure of two decades ago and making it harder for first-time buyers.
- New England’s economy looks flat but stable, with modest strength in manufacturing and services offset by softer tourism, housing, and commercial real estate—an environment that warrants conservative growth assumptions and selective local risk‑taking.
What Would It Take to Tip the Economy into Recession? Oil Prices & Recession Risk Roadmap by Wells Fargo
Recession’s still not the base case, but high oil prices increases the risks especially with inflation above the Fed’s 2% target. Wells Fargo says to watch oil prices. At 50% higher than when the Iran conflict started, we’ll see a 1% shaved off PCE, more than offsetting the benefit from last year’s tax package. At 100% higher, we could see two quarters of economic contraction.
The potential impact of high oil prices on economies by Vanguard
Vanguard agrees that the U.S. economy won’t tip into a recession unless oil prices stay dramatically higher for a while. They think that it means rate cuts will be harder to see happening this year and warn that staglation is a European, not American, risk.
How Much Will Your Long-Term Care Needs Cost? It Depends on How Average You Are by Center for Retirement Research at Boston College
While an average 65‑year‑old “needs” about $135,000 for high‑intensity long‑term care, actual costs vary dramatically by gender, health, location, and investment returns. Many people will need little or no paid care, but a minority—especially women in high‑cost, long‑longevity states—can face multi‑year care needs costing several hundred thousand dollars, far above typical retiree savings. Use the $135,000 as a planning starting point, but remember that costs in the Northeast are higher.
More CEOs envision hiring than firing due to AI, CEO survey finds by Axios
Most large‑company CEOs now say AI is more likely to be a hiring driver than a job killer, with just 9% expecting to cut staff because of AI and 55% expecting to add roles as they adopt it. They’re optimistic about AI’s long‑term payoff but frustrated that short‑term returns lag, in part because it takes time to redesign processes and organizations to truly benefit from the technology. At the same time, they see AI as a major cyber risk, with roughly 9 in 10 worried about AI‑driven malware and phishing and many also concerned about future quantum threats to financial and customer data.
Homeowners Stay Put 12 Years, Stifling the US Housing Market by Bloomberg
U.S. homeowners are now staying in their homes for about 12 years on average, nearly double the typical tenure from two decades ago, as higher mortgage rates, moving costs, and accumulated housing wealth discourage selling. This “lock‑in” effect keeps inventory tight and prices elevated, especially at the entry and family‑home levels, making it much harder for first‑time and move‑up buyers to enter or trade up in the market.
Book Recommendation
The Monster of Florence by Douglas Preston and Mario Spezie
I read this after watching an Italian Netflix mini-series doc by the same name. Read the true story that inspired the hit Netflix series! Douglas Preston, author of the #1 New York Timesbestseller The Lost City of the Monkey God, presents a gripping account of crime and punishment in the lush hills surrounding Florence as he seeks to uncover one of the most infamous figures in Italian history.
Boston Corner
The Beige Book – First District
Economic activity across New England is essentially flat, with modest growth in manufacturing and nonfinancial services offset by weaker tourism, softer housing, and a slight pullback in commercial real estate. Employment has edged down and wage growth is only slight. Prices are rising only modestly, but tariffs and higher nonlabor costs (insurance, utilities, key inputs) are pressuring margins, and low‑ and moderate‑income households remain under significant strain from high food, rent, and energy costs
