Economic storm clouds on the horizon could be the first sign of a looming, recession, according to many economic experts.

“Recession risks are high — uncomfortably high — and rising,” Mark Zandi, chief economist at Moody’s Analytics, told The Washington Post.

“For the economy to navigate through without suffering a downturn, we need some very deft policymaking from the Fed and a bit of luck."

Zandi said high gasoline and commodity prices from pandemic-related supply chain snarls and Russia's invasion of Ukraine war help make the odds of a recession in the next two years at around 50 percent.

A recession is defined as two consecutive quarters of negative contraction in the economy. The U.S. economy contracted in the first quarter of this year, the Post reported in late April.

“We’re traveling very close to the edge,” Zandi told the Post. “The housing market is the next thing that’s going to roll over; the question is just how hard.”

He is not alone.

Former Goldman Sachs chief executive Lloyd Blankfein this week said there is a “very, very high risk” of recession, while Wells Fargo CEO Charlie Scharf said there was “no question” the economy is facing troubles, whatever the label may be.

Former Federal Reserve chair Ben Bernanke said stagflation – a slow economy and high inflation that were a hallmark of the 1970s – could be near.

The Federal Reserve has raised interest rates .75 percentage points this year, and may do more to cool inflation. But that carries its own risks for the economy, as shown by a drop in new home construction and demand for mortgages. Both are very sensitive to interest rates, which have roughly doubled on 30-year mortgages over the past year.

"There is an extreme sense of nervousness out there,” Kevin Retcher, president of First Meridian Mortgage in Alexandria, Virginia, told the Post.

“It’s rare to have people win contracts and then back out, but that’s what’s been happening,” he said.

“Home builder sentiment fell to the lowest level in two years in May,” Yelena Maleyev, an economist for Grant Thornton, said in an analyst note, according to the Post. “Builders are seeing less foot traffic and expect sales to be softer as we enter the busy home-buying season.”

Although so far, consumers have been spending as if there was a need to make up for time lost during COVID-inspired lockdowns, inflation that is hitting 40-year highs may be taking its toll.

Big retailers have posted disappointing earnings, so much so that Walmart’s stock took an 11 percent hit on Tuesday, its worst free fall in 35 years, according to the Post. Target was next, with a 26 percent drop in its stock following a 52 percent drop in its quarterly profits, the Post reported. Target ascribed its woes to a slow consumer demand for big-ticket items.

“While we anticipated a post-stimulus slowdown in these categories … we didn’t anticipate the magnitude of that shift,” Brian Cornell, Target’s chief executive, said in a Wednesday earnings call, the Post reported. “When we talk to our guests, they often express their concerns about a host of rapidly changing conditions, ranging from geopolitics to the high and persistent inflation they’ve been experiencing.”

Some say the issue is how to adjust the economy without destroying it.

“Near term, the U.S. economy is holding up rather well despite the trouble abroad and the high prices at the checkout stand,” Beth Ann Bovino, chief U.S. economist for S&P Global, told the Post.

Bovino estimated a 35 percent risk of recession in the next year.

“People are spending, businesses are still trying to hire. But there are certainly challenges ahead," she told the Post. "The Fed’s actions will slow the economy, but the question is whether they could also topple the applecart.”

This article appeared originally on The Western Journal.