All articles tagged with #stagflation
Kalshi traders now assign about a 40% probability of stagflation (high inflation with higher unemployment) by end-2026, up from 11% earlier, as April CPI hits 3.8% and unemployment sits at 4.3%; the odds of a soft landing are down to ~21%, with different views on inflation and outcomes from other markets like Polymarket.
One month into the US-Israel war on Iran, the global economy faces a sharp oil-price spike above $100 a barrel, driving higher gasoline costs and inflation while straining supply chains for critical inputs like helium and fertilizer; airlines reroute and raise fares as air travel falters, and economists warn of stagflation risks amid policy-tightening and growth uncertainty.
Barclays says market resilience tied to Trump’s de-escalation signals may be fading as policy uncertainty rises; equities, oil, and rates have been volatile on shifting Iran deadlines and Middle East tensions, with the bank warning that a longer conflict and oil shock could lift inflation and weigh on growth. Its economists expect global growth near 2.9% in 2026 and inflation around 2.7% by year-end, with advanced economies slowing to about 1.7% in 2026, signaling a higher risk of stagflation.
MarketWatch highlights that during the 1973–1982 stagflation era, US small-cap stocks outpaced inflation by about 5.9% annually and housing by about 5.5% annually, while gold underperformed as an inflation hedge over that span, suggesting small-caps and housing are the two overlooked defenses against stagflation.
Analysts back a trio of Strong Buy stocks—VNOM, FANG, and ABT—as oil-price-driven inflation fears rise; each offers defensive appeal with dividend yields and upside targets, signaling potential protection and returns in a stagflation scenario.
A prolonged Iran conflict could disrupt energy routes and scarce by‑products—oil, gas, LNG, helium, fertilisers—via chokepoints like the Strait of Hormuz. Even limited disruptions could lift prices, strain supply chains, and slow growth, potentially triggering stagflation if the war lasts longer than investors expect, with the Gulf, Europe, East Asia and the US all feeling effects.
Spiking oil prices tied to Iran raise fears of 1970s-style stagflation, but today’s dynamics—no clear gold rally or dollar weakness yet—could lead to a different outcome for inflation and economic growth.
Oil prices surged past $115 a barrel as the US-Israel conflict with Iran deepened, triggering stock-market sell-offs and raising fears of a global energy-driven inflation spike and stagflation, with growth expected to slow and central banks facing limited room to ease policy.
Oil prices surge amid Middle East war fears, dampening risk appetite and essentially ending hopes for a market melt-up. Ed Yardeni warns the spike could trigger stagflation, higher yields, and a raised 2026 recession probability (about 35%), implying equities face downside risk if energy constraints persist.
Economist David Rosenberg argues that higher oil prices from the Iran conflict will squeeze consumer demand and push inflation down by year-end, making stagflation unlikely. He says inflation is on a long-term cooling path, with M2 around 4% and the Fed likely to hold rates with only a few cuts priced in as real incomes and GDP growth slow, while past oil shocks show inflation can spike before receding.
The article suggests that 22 US states are nearing or in recession, with economic growth being weak and job creation at its lowest since the 2020 recession, potentially indicating an ongoing or imminent recession influenced by tariffs and economic policies.
The US economy is showing signs of stagflation, with declining business activity in key sectors and rising costs due to tariffs, complicating monetary policy and raising concerns about a potential repeat of 1970s economic conditions.
Federal Reserve Chair Jerome Powell highlighted the challenges posed by rising inflation and a slowdown in hiring, emphasizing the delicate balance the Fed must maintain between controlling inflation and supporting employment amid economic turbulence and political pressures.
The Federal Reserve cut interest rates for the first time in a year amid economic challenges, including a slowing labor market and rising inflation, amidst political pressure from President Trump who seeks further rate reductions. The move aims to balance inflation control with employment growth, with the Fed projecting additional cuts, despite ongoing political and legal battles involving Fed officials.
The US economy is approaching stagflation due to recent policies like tariffs and immigration restrictions, which are slowing growth and increasing inflation, raising concerns among economists about a potential prolonged period of stagnant growth combined with rising prices.