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erienewsnow.com 12 Jan, 2022 20:30 am

If prices keep rising, a nightmare scenario for the US economy is a real possibility - Erie News Now

If prices keep rising, a nightmare scenario for the US economy is a real possibility - Erie News Now
By Paul R. La Monica, CNN Business

Stagflation is a difficult problem to overcome, especially for central bankers at the Fed and around the rest of the world.That's a major concern right now in the United Kingdom, where central bankers raised rates last month to combat higher prices.Central bankers have had to deal with many crises in recent decades, but there is no modern playbook for how to handle the threat of runaway inflation following a global pandemic."Consumers may get to a point where they're not going to pay higher prices and that causes demand destruction.

"Stagflation could be a concern if higher prices persist for an extended period of time.The Fed is carrying a monetary policy nuclear football with them, so there is a potential for a mistake," said Kristina Hooper, Invesco's chief global market strategist.

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