U.S. Faces Growing Stagflation Risks Amid Trade Policies and Inflation Pressures

Experts warn that President Trump's tariffs and economic policies could lead to a rare mix of slowing growth and persistent inflation.

Economists are increasingly concerned about the possibility of stagflation, marked by high inflation and slow or stagnant economic growth, reminiscent of the 1970s.
President Trump's proposed tariffs on imports from Canada, Mexico, and China, along with new levies on steel, aluminum, autos, and pharmaceuticals, are expected to raise costs and weigh on economic growth.
Inflation has risen to 3% annually, with persistent pressures from higher rents, wage growth, and tariffs, while the Federal Reserve's ability to counter inflation is constrained.
Labor market stability is showing signs of strain, with slower hiring and reduced job mobility, raising concerns about potential unemployment increases.
Investors and analysts are divided on the long-term impact of tariffs, with some predicting temporary growth hits and others warning of sustained inflationary and economic risks.