Stagflation is a scenario where the economy is riddled with three major problems, namely, high inflation, slow growth, and rising unemployment. Sounds familiar? That is because it is the reality now, and this situation can continue as the war in the Middle East rages on. While gas prices are hovering near their highest levels since 2022 at about $3.50 per gallon, non-farm payrolls declined by 92,000 compared to estimates of a growth of 50,000 in February, dealing another major blow to the economy.
The Federal Reserve is also caught between a rock and a hard place, as cutting rates would add fuel to the inflation, while raising rates is also not a good proposition for corporate America.
