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Rising Risk of Stagflation
- Growth can be impaired if consumer spending exceeds rate of inflation
- Withdrawal of fiscal, monetary stimulus could slow economic growth
- Rising wages and producer prices could cut into corporate profit growth
- Can the Fed deliver a ‘soft landing’ for the economy without a recession?
Will There Be an Inflation-Jobs Trade-Off?
- Minor changes to rates unlikely to lead to rise in unemployment
- When rate hikes exceed inflation rate, recession may occur
- Fed is in first stage of raising rates, shrinking balance sheet