Stagflation has emerged as a concern due to the current economic uproar
Forbes Media’s Steve Forbes joins the “Big Money Show” to talk about the international significance of rising trade tensions between the US and China.
Economic uncertainty brought about by the president Donald Trump’s Tariffs on US trading partners raise concerns that the economy could face male dogs if conditions persist.
Stagflation is a commonly used term. Economic Growth It also stagnates while experiencing high inflation, potentially contributing to rising consumer prices, potentially weak labor markets and ultimately high unemployment.
Duties are taxes on imports, usually paid by importers who pass on some or all of the higher costs facing consumers at higher prices, and are dynamic, which has sparked concerns about a revival of inflation. Consumer inflation expectations have risen in recent months, in a Federal Reserve survey ahead of tariff-induced price increases to tackle many consumer goods.
Recent economic data adds to concerns about the potential launch of STAGFLATION. Data released last week by the Commerce Department showed that US gross domestic production (GDP) contracted at an annual rate of 0.3% in the first quarter of 2025.
The US economy has slowed sharply, shrinking by 0.3% in the first quarter.
Uncertainty and economic dislocation caused by tariffs can lead to bulls in the US economy. (Spencer Platt/Getty Images)
“This type of data won’t soothe the market, whether it’s a warning shot of stagflation over the economy’s bow, whether it’s a weak GDP today reflects a partial reflection of companies seeking to preempt tariffs or a warning shot of stagflation over the bow of the economy,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, said last Wednesday.
David Bernsen, managing partner and chief investment officer of wealth management company, told Fox Business in an interview with Bernsen Group Stagflation environment It will pose challenges for the Federal Reserve as central banks appear to balance their dual mission of promoting stable prices and maximum employment.
The US trade deficit hit a record hit in March
As the central bank balances dual duties, the male dog will pose challenges for the Federal Reserve and Chairman Jerome Powell. (Alex Wong/Getty Images)
“There’s almost nothing Central Bank In that case, the reason for the price increase is not financial, so it can be done about stagflation.
Bernsen continues, expecting that Trump administration will pull back most of its tariffs at some point, but it will allow price hikes to be unlocked, and the uncertainty surrounding the duration and scope of tariff policy is Economic slowdown As businesses pull back investments to make them more clear.
“I don’t think the price rise will be permanent, mainly because I think the Trump administration will be making a big walkback on most of the tariffs they are threatening,” he said. “I believe that a much bigger question is stagnation. So, what is the slowdown in economic growth because of policy?”
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“That’s my big concern, but I really don’t have the ability to answer that. I really don’t have the ability to game how it goes, as I’m not sure if I’ll pull back all the tariffs tomorrow,” Baansen said. “The magnitude of the economic impact and the length of the economic impact are all actually directly correlated with the amount of this uncertainty that continues, and we don’t make it clear at this point.”