EVERYTHING OLD IS NEW AGAIN! Wall Street’s latest dirty word—stagflation:
A tightening labor market and rising inflation against a backdrop of slowing overall growth are painting an increasingly stagflationary picture for the U.S. economy.
Stagflation, or conditions in which costs are rising but growth is not, last was seen in the 1970s, before then-Fed Chair Paul Volcker had to push the economy into recession to slay the inflation dragon.
Now, with a variety of factors coming together to show inflationary-deflationary cross currents, Wall Street is bracing for another battle.
Welcome back Carter! Although as someone once warned, when it comes to foreign, domestic, and economic issues, “at this point a Carter rerun is probably a best-case scenario.”
(Incidentally, note that CTL-F “Carter” brings up zero returns in the above CNBC article. “Unexpectedly.”)