Stagflation, a rare combination of high inflation and stagnant economic growth, is once again threatening the stock market rally. Strategists warn that investors are in a “generally pessimistic outlook” due to growing concerns about this mix.
Despite past instances where stagflation fears resurfaced, confidence in the US economy has historically prevailed. However, current data suggests otherwise. As inflation remains above the Federal Reserve’s 2% target, investors are struggling to shake off worries.
The situation is becoming increasingly challenging for market participants. While there may not be enough data to shock investors out of their current mood before March 7-12, strategist’s caution signals a more pessimistic outlook ahead.
Source: https://www.marketwatch.com/story/stagflation-is-the-new-threat-to-stock-market-rally-what-investors-should-know-eabde846