Torsten Sløk, chief economist at Apollo Global Management, warns that the US economy is at a critical inflection point for stagflation. This dire scenario combines slowing economic growth with persistently high inflation.
The situation has been triggered by President Donald Trump’s tariffs, which increase the probability of an economic slowdown while driving up prices. As a result, consensus forecasts for economic growth have drifted lower this year, while inflation expectations have risen.
Sløk predicts four outcomes for the US economy:
1. GDP is expected to more than halve from its peak last year, slowing to around 1.2% in 2025.
2. Inflation will likely hover above average, reaching 3% by the end of 2025.
3. Unemployment rates are forecast to rise, reaching 4.4% in 2025 and potentially higher in 2026.
4. The economy is at risk of entering a recession as early as this summer, with Apollo pegging the chances at 25%.
Source: https://www.businessinsider.com/stagflation-recession-us-economy-inflation-unemployment-outlook-apollo-torsten-slok-2025-6