WARNING: THE US ECONOMY IS HEADING TOWARD STAGFLATION
Recently, data on the US Producer Price Index (PPI) and Core Producer Price Index (Core PPI) were released.
US PPI reached 2.9% compared to the expected 2.6%.
US Core PPI hit 3.6%, the highest in 11 months.
This is a clear sign that inflation in the US is rising again.
But what about GDP?
US Q4 GDP grew by 1.4%, the lowest in three quarters.
This means the economy is contracting while inflation is rising.
That is stagflation, and it is the worst situation for an economy.
In such periods, loose monetary policy helps increase GDP but worsens
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