No. of Recommendations: 5
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discussion.fool.com - Stagflation beginsThese reports pre-date the Iran war which is likely to spark inflation.
nytimes.com - Consumer prices inflation pce february
U.S. Economy Was Vulnerable Before War With Iran
Economic growth at the end of 2025 was revised downward and consumer prices rose at the start of 2026.
By Talmon Joseph Smith, The New York Times, March 13, 2026
Economic growth was slower at the end of 2025 than data first showed and inflationary pressures persisted at the start of this year, a troubling snapshot of an economy on unsteady footing before war with Iran upended oil and financial markets.
Consumer prices increased moderately in January, the Federal Reserve’s preferred inflation gauge showed on Friday. Economists worry prices will march even higher in the coming weeks. And gross domestic product, the benchmark measure of economic growth, which is adjusted for inflation, was revised down to a 0.7 percent annual pace for the last three months of the year… [end quote]
This chart shows CPI and the PCE index overlaid. CPI directly impacts TIPS yields and Social Security. The Fed pays more attention to PCE because of its different weighting of housing and medical costs. Core PCE is 3% which is moving away from the Fed’s goal of 2%.
Since the beginning of 2026 the Cleveland Fed’s Inflation Nowcast has trended up.
At the same time, the economy slowed.
wsj.com - Economy was even slower in fourth quarter new estimate shows
Economy Was Even Slower in Fourth Quarter, New Estimate Shows
GDP grew at 0.7% annual rate late last year, down from initial reported pace of 1.4%
By Justin Lahart, The Wall Street Journal, March 13, 2026
The Commerce Department reported the U.S. economy grew at an 0.7% annual rate in the fourth quarter, revised from 1.4%.
The downward revision was driven by slower consumer spending and business investment.
International trade weighed on the GDP calculation, contrasting with the slight boost it provided in the advance report… [end quote]
The Fed won’t cut the fed funds rate in this environment of rising inflation and uncertainty. But the slowing economy will put pressure on them.
FRED Graph
Wendy
