Why the Fed’s fumble on inflation leaves the economy vulnerable to stagflation

MarketWatch/Peter Morici/7-11-2023

“The Federal Reserve’s recent pausing of interest-rates hikes opens America’s door to stagflation.… A rate-hike pause now with promises of two more quarter-point interest rate increases in the future reflected the split among Fed policymakers between hawks and doves, rather than effective inflation-fighting policy.”

USAGOLD note: Morici, an economist at the University of Maryland, sees inflation as staying in the 4% range while economic growth runs at less than 2%. That, he says, is stagflation.