Home Markets ‘Stagflation is here,’ following months of rising prices, BofA analysts say

‘Stagflation is here,’ following months of rising prices, BofA analysts say

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For months prices have been rising as the U.S. economy has recovered from the COVID pandemic while financial markets have stayed priced for perfection and central banks have clung to the view that elevated inflation would likely subside in short order.

Now, fears about higher prices are coming to the fore, with BofA Global Research analysts declaring in a Friday note that “stagflation is here” and a government report showing U.S. inflation still at a 30-year high as of August. Even central bankers appeared to be starting to capitulate this week, with Federal Reserve Chairman Jerome Powell saying that high inflation could run into 2022.

Rather than dissipating, price pressures are holding consistently firm and could be getting harder to dislodge as time goes on. At the moment, a global energy shortage is also unfolding across the U.K., Europe and China, shaking up investors previously distracted by COVID’s delta variant, the…

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