2 May 2024
During a recent conference, Federal Reserve Chair Jerome Powell dismissed concerns about stagflation, referencing historical contexts where stagflation involved much harsher economic conditions than those seen today. Despite a GDP growth report of 1.6% and a core PCE price index increase of 3.7%, Powell cited current solid growth and inflation under 3% as evidence against imminent stagflation. However, given Powell’s previous misjudgments on economic trends, including a missed prediction on post-pandemic inflation spikes, UBS has developed strategies in case his current assessments prove incorrect again.