The Economy & the Fed

Stagflation

The uncomfortable mix of high inflation with a stagnant economy: slow or shrinking growth and rising unemployment at the same time. It is hard to fix because the usual cure for each problem worsens the other — raising interest rates to slow inflation also slows the economy further, while cutting rates to help growth can push prices up more. The US went through a well-known stretch of it in the 1970s, when oil price shocks drove up costs while the economy stalled.

Educational information, not investment advice. See it applied across the screener →