'Stagflation' fears haunt US markets despite Trump's pro-growth agenda
Posted: Feb 20, 2025
- Fears of stagflation, a mix of sluggish growth and relentless inflation, have re-emerged due to stubborn inflation and Trump's trade policies
- Key concern is inflation that refuses to cool down
- Tariffs could lead to stagflation by adding inflationary pressure
- Investors are bullish on stocks despite rising concerns about stagflation risks
- Rising interest in gold indicates investor worry about stagflation
- Some believe tariffs could promote long-term growth, while others think they will increase price pressures
- Market may be underestimating stagflation risks, with negative supply shocks like tariffs contributing to the problem
- Interest in gold and potential shift to 10-year Treasuries seen as strategies to hedge against stagflation risks, but some investors are holding off on big shifts for now.
- Stubborn inflation and Trump's trade policies are causing fears of stagflation, a mix of slow growth and high inflation
- The potential return of stagflation is worrying investors, despite optimism about Trump's pro-growth agenda
- Concerns arise from tariffs potentially slowing down the economy and adding inflationary pressure
- A survey of fund managers shows rising expectations of stagflation, defined as below-trend growth and above-trend inflation
- While some believe any growth hit from tariffs would be temporary, others warn about underestimating stagflation risks
- Gold prices surge, indicating investor worries, as it is seen as a safe asset in a stagflationary environment
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