Markets are grappling with renewed stagflation fears as stubborn 3% inflation combines with concerns over President Trump’s aggressive trade policies.
While investors remain generally optimistic about Trump’s pro-growth agenda, a Bank of America survey shows fund manager worry about stagflation has reached a seven-month high.
The threat of new tariffs on autos, semiconductors, and pharmaceuticals, along with existing trade measures, could simultaneously slow growth and fuel inflation, creating conditions reminiscent of the 1970s economic challenge.