DALLAS, Oct. 26 (UPI) -- The senior economist for the Federal Reserve Bank of Dallas said Tuesday that high oil prices are unlikely to push the U.S. economy into a recession.
Stephen Brown, senior economist for the regional central bank, said although the high price of oil will not drive the nation's economy into a recession they will weigh on economic growth.
Oil prices, currently hovering around $55 a barrel in New York, have remained much higher for much longer than many observers expected, lifting concerns that the economy could stall out if prices don't ease.
That in turn is the major downside risk for oil markets, which have been driven higher by soaring growth-fueled demand.
"I think the answer is no," Brown said when asked if high prices would cause a recession. "But it is causing problems to the economy."
"It's a slight drag on the U.S. economy," he said.
The economist said he doesn't expect high energy prices to fade. U.S. natural gas prices, for instance, are likely to remain in a range of $5 to $6 per million British thermal units, Brown said, about twice the level that prevailed in the 1990s. Oil will be no different.
"The whole structure of oil prices has shifted upward, and that's a relatively permanent shift," Brown added.
