Balancing Inflation and Growth Risks

Higher inflation with increased growth might be manageable, although it could delay the eventual decrease in inflation and growth. Signs of stalling growth alongside rising prices raise the risk of stagflation. While stagflation is a growing concern and a key risk for the US economy, there are indications that slower final demand growth may alleviate inflation pressures in 2024. Consumers are already showing price sensitivity by scrutinizing purchases, indicating a potential disinflationary trend ahead.