Wall Street strategists are sounding the alarm that the US economy is heading toward stagflation, as trade tariffs take their toll. The impact on interest rates may be limited, however. Historically low inflation and strong economic growth have masked warning signs until now. Data suggests an impending period of sticky inflation and sluggish growth.
The term “stagflation” refers to a combination of stagnant economic growth and high inflation. The US has not experienced this condition since the late 1970s under President Jimmy Carter’s administration. A significant indicator of stagflation is the decline in the value of the US dollar, down 8% against a basket of peers.
Source: https://www.bloomberg.com/news/newsletters/2025-08-07/tariff-induced-stagflation-fears-hit-wall-street-evening-briefing-americas