Fox Business: JPMorgan Warns Investors Should Brace for 1970s-style 'Stagflation'
Article by Megan Henney in Fox Business
U.S. stocks smashed a new record high last week, but the rally may not last for long thanks to heightened risks that the economy returns to a 1970s-style stagflation scenario, according to JPMorgan Chase strategists.
In an analyst note to clients, the bank's chief market strategist Marko Kolanovic warned that the economy may turn away from a "Goldilocks" scenario – in which it is not expanding or contracting by too much – and enter a period of stagflation similar to that experienced in the 1970s.
"Going back to the question of market macro regime, we believe that there is a risk of the narrative turning back from Goldilocks towards something like 1970s stagflation, with significant implications for asset allocation," Kolanovic wrote.
Stagflation is the combination of economic stagnation and high inflation, characterized by soaring .....