Stagflation is America’s Most ‘Optimistic Scenario’ at This Point, Former Fed President Says

Stagflation might be the best-case America can hope for amid Trump’s tariffs, former Fed president Bill Dudley said.

by Filip De Mott
Yahoo! Finance

Once painted as a worse-than-recession scenario, stagflation might now be the best that Americans can hope for with the trade war about to be in full swing.

Bill Dudley, former president of the New York Federal Reserve Bank, says only one question remains: how bad will the damage be?

Whereas a “Goldilocks economy” seemed alive and well at the start of this year, tariff policy has flipped the economic outlook in a matter of days.

Writing in a Bloomberg opinion piece, Dudley said he expects devastating consequences from the White House’s across-the-board tariffs. As dwindling demand derails US growth, 5% inflation is likely in the next six months, he said.

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