Inflation in the U.S. has been an ongoing issue, peaking in 2022 at over 9%. Recent patterns suggest it might remain elevated, causing concerns about a potential stagflation scenario. Unlike regular inflation, stagflation embodies stagnant growth coupled with rising prices and potential increases in unemployment. Historical precedents from the 1970s indicate the severe economic impact of stagflation, characterized by simultaneous high inflation and low GDP growth. Thus, investors are warned to consider strategies during these uncertain economic times.
Stocks have long been a solid inflation-busting asset, despite volatility.
The worst may not be over. In fact, there's reason to believe the economy may be headed for something worse than inflation - stagflation.
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