EVERYTHING IS GOING SWIMMINGLY: Even a Recession Might Not Tame Inflation. “There is a possibility we could get a recession and still have high inflation — essentially a return of the 1970s stagflation. This could happen if a recession comes with another supply shock, like a pull-back in trade or an increase in energy prices. Some economists argue that the 1970s stagflation was due to expansionary monetary policy, which means that if a recession prompts the Fed to cut interest rates or restart quantitative easing before inflation is subdued, we could end up with high inflation and a recession.”