On Investing

Considering the Risk of Stagflation & Uncertainty

4 snips
Mar 21, 2025
Liz Ann Sonders and Kathy Jones dive into the implications of a recent Federal Reserve meeting, emphasizing the looming threat of stagflation. They explore the intricacies of inflation, discussing consumer perceptions and the effects of monetary policy changes. The impact of rising trade policy uncertainty on businesses is also highlighted, alongside the disconnect between soft and hard economic data. The conversation underscores the importance of tracking essential economic indicators to navigate an unpredictable economic landscape.
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INSIGHT

Stagflationary Signals

  • The Fed projects higher inflation and lower economic growth than previously anticipated.
  • This implies a potential stagflationary environment, increasing uncertainty.
INSIGHT

Dot Plot Dispersion

  • The Fed's dot plot reveals significant dispersion, especially regarding longer-run estimates.
  • This wide range highlights the uncertainty surrounding future economic conditions.
INSIGHT

Economic Data Divergence

  • Current economic weakness is primarily evident in softer, survey-based data like confidence measures.
  • However, this weakness is starting to affect harder data, potentially signaling a broader downturn.
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