Post #4594

🚨 THIS IS VERY CONCERNING The US economy might be heading towards stagflation, and the consequences could be disastrous. Since the US-Iran war has started, oil prices are going through the roof. In just 5 days, US oil prices have moved from $70 to $82, an 18% increase. Using data since the last CPI release, US oil prices are up nearly 32%, or $19.6. As per estimates, every $10 increase in oil prices causes a 0.2% rise in inflation and a 0.1% drag on GDP. Right now, the US CPI is at 2.4%, while last quarter's GDP was at 1.4%. If accounting for the oil price increase, CPI is now at 2.8%, while the GDP has dropped to 1.2%. This means inflation is about to run hot again, while economic growth will shrink, a scenario called "stagflation." And this is the worst-case scenario for an economy. During stagflation, if the Fed: Does tightening ➙ Inflation will cool down, but economic growth will get worse. Does easing ➙ Economic growth will get better, but inflation will go up even more. Now, the only hope is that the US and Iran reach a negotiation, allowing oil tankers to move easily. This will result in more supply entering the market, and oil prices will fall, causing future inflation to cool down while economic growth rises. @odes_ai