The US economy may be barrelling towards stagflation, an outcome worse than recession

The latest U.S. GDP and inflation readings have raised concern among investors. The first-quarter GDP growth fell well behind estimates, increasing at an annualized rate of 1.6%, compared to forecasts of 2.5% and the previous quarter’s 3.4% growth. This slower growth, combined with higher-than-expected inflation, presents bad news for the economy.
The report indicates that while the slower growth might suggest a need for interest rate cuts, the unexpected rise in consumer prices limits the Federal Reserve’s ability to take action. This raises concerns about stagflation. Analysts like JPMorgan’s Jamie Dimon have warned about the possibility of a stagflationary environment, citing concerns that markets have become too optimistic about the state of the economy.