Powell's Dilemma: Trapped Between A Rock And A Hard Place

  • Central banks struggle with stagflation, marked by high inflation, high unemployment, and slow economic growth, limiting their ability to effectively manage the economy. Recent tariffs on China have disrupted supply chains, potentially triggering stagflation by increasing inflation, unemployment, and contracting real GDP. Market optimism hinges on the belief that tariffs will be lifted soon, but delays in resolving trade issues with China could cement stagflation risks.