[tomder55]

Just to refresh your memory from the foggy days of the 70's . Stagflation is the combination of high inflation coupled with slow growth and rising unemployment. To combat inflation the Fed raises interests rates .But when they do that the intent is to slow down a hot economy. But if the economy is sluggish then raising interest rates becomes problematic.

We are not quite there yet .But we are well on the way. Economic growth this last quarter was slightly over 1 % But inflation is still at unacceptable levels according to the 2% target the Fed has set. The personal price index grew at a 4.2 percent Excluding food and energy, it rose 4.9 percent, the quickest in a year . The only thing that prevents a definite stagflation is unemployment numbers are still good . But as businesses tighten the belt ;that is likely to change.

The Fed has indicated it will raise rates in May. But then who knows ? They may pause; especially as the election cycle is entered into. Households are rapidly using up the pandemic gimmees . So we can expect consumer belt tightening . Higher interest rates have already increased mortgage rates and is cooling down the housing market.

[jlisenbe]

Whatsoever a man soweth...

[Jimgo]

Honestly, my belt been tight already with all those prices going up and up over last months. It feels like we are inches away from another economical disaster...

[tomder55]

Jim we are close to what they call a 'hard landing ' .

Hard Landing Definition (investopedia.com)

The Federal Reserve this week will most likely raise interest rates again in an attempt to slow inflation . It may have a nominal impact but will definitely slow the economy down, Then if the clowns in Washington can't agree on raising the debt ceiling to pay the countries debts then we will crash into a recession or worse.

I have no answers . For 20 years we have had a fiscally irresponsible nation (and even longer if you consider that reckless spending began in the 1960s )

[jlisenbe]

Tom, your reply seems to be right on target. And while liberal dems bear most of the blame, repubs had their big chance in Trump's first two years. Rather than reigning in irresponsible spending and moving towards a balanced budget, they stupidly chose to increase the deficit. Meanwhile, the average American couldn't care less. That could very well change soon.

[tomder55]

The French had a torture method where a board was placed on someone's chest and heavier and heavier stones were placed on the board until the person punished would be asphyxiated by the weight. It was called 'peine forte et dure'.

This is what our government is doing to the American people. The accumulated weight of the national debt is going to crush the country .