The Federal Reserve is poised to set out a path to rapidly withdraw support from the economy at its meeting on Wednesday — and while it hopes it can contain inflation without causing a recession, that is far from guaranteed.
Whether the central bank can gently land the economy is likely to serve as a referendum on its policy approach over the past two years, making this a tense moment for a Fed that has been criticized for being too slow to recognize that America’s 2021 price burst was turning into a more serious problem.
The Fed chair, Jerome H. Powell, and his colleagues are expected to raise interest rates half a percentage point on Wednesday, which would be the largest increase since 2000. Officials have also signaled that they will release a plan for shrinking their $9 trillion balance sheet starting in June, a policy move that will further push up borrowing costs.
It has been several decades since the term “stagflation” was front and center in the American lexicon. However, based on several economic signs, we might find ourselves uttering the “s” word once again in the months and years to come.
In general, stagflation is defined as an economy rife with inflation while simultaneously experiencing stagnant growth. Although the term was first coined by British politician Iain Macleod in the 1960s, it gained prominence when it became the go-to phrase to describe America’s economic situation of high inflation and low/negative GDP growth during the mid to late 1970s.
For those worried that we could be on the brink of experiencing another bout of stagflation, unfortunately, ample evidence points in that direction.
See this strong economy? The consumer is so strong that more and more people have stopped producing.
US trade deficit widens to $-109.8bn. pic.twitter.com/VeoarI5IdZ
— Fabian Wintersberger (@f_wintersberger) May 4, 2022
- CRISIS IN SRI LANKA, No Gas, No Food, Country is Bankrupt, Politicians Being Beat, Murdered, Gov Buildings on Fire, Over 3000 killed in last 24 hours
- New York Post: Front Page: “Joe’s Train Wreck”
- 12 Nightmarish Economic Trends That We Should Expect To See During The 2nd Half Of 2022
- How Has Monkeypox Spread All Over The Globe At Lightning Speed?
- Everyone is Going to Starve to Death Because of American Lunacy
- Kim Dotcom’s Twitter Thread About the Great Reset
- From 1958, 2003/06 – CDC Vaccine Adverse Events, Smallpox – Holy Hell
- A large fire is spreading from a pallet yard behind the US Foods distribution center in Phoenix, Arizona
- Fed Insider: “The Fed is NOT Coming to Save Stocks This Time”
- Madison Cawthorn Kicked Out of Congress for Blowing the Whistle on GOP Orgies and Calling Out Zelensky