CAP en Español
Small CAP Banner

Stagflation, Not Strong Growth, Justifies Pause

    PRINT:
  • print icon
  • SHARE:
  • Facebook icon
  • Twitter icon
  • Share on Google+
  • Email icon

It’s not an easy time to be a member of the Federal Open Market Committee. You learn in Economics 101 that you tighten interest rates in an inflationary environment and ease on weaker economic demand. When faced with the dreaded "S" word — stagflation — there are no sure textbook answers.

So you could hardly fault the FOMC on June 25 for deciding it was best to push the pause button at a Fed Funds rate of 2 percent. With some forecasters now projecting inflation accelerating to as much as 6 percent on price increases in energy, food and other commodities, the Fed could have defended a pause as the best of bad options amid potential stagflation.

Read more here.

To speak with our experts on this topic, please contact:

Print: Katie Peters (economy, education, poverty, Half in Ten Education Fund, women's issues)
202.741.6285 or kpeters@americanprogress.org

Print: Tom Caiazza (foreign policy, health care, LGBT issues, gun-violence prevention, the National Security Agency)
202.481.7141 or tcaiazza@americanprogress.org

Print: Chelsea Kiene (energy and environment, Legal Progress, higher education)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org