- With prices rising and many uncertainties facing the U.S. economy, the risks of stagflation – that is, 1970s-like elevated inflation with slow growth or even a recession – are rising.
- There was massive fiscal stimulus in 2020 and 2021 during the pandemic, and those stimulus payments have come to an end.
- The bottom line is that rising inflation, withdrawal of policy stimulus, and potential for eroding corporate profit margins all add to the risks of stagflation – that is, high inflation with little economic growth.
For further details see:
Stagflation Risks: Why The 2022 Landscape Is Different