**US Stagflation Risks: A Real Threat or an Overblown Prediction?**
Since Donald Trump’s presidential election, there has been some concern that the United States could enter a period of stagflation, a major economic problem characterized by stagnant growth and rising inflation.
JPMorgan Chase Chairman Jamie Dimon has expressed concerns about this, pointing to the fiscal and monetary stimulus measures implemented in recent years. He has argued that these extraordinary policies could lead to stagflation similar to that of the 1970s.
However, his predictions have been challenged by some leading economic figures, including Federal Reserve Chairman Jerome Powell, who dismissed the idea of stagflation in a press conference.
Donald Trump’s tariff plans could make the situation worse. Its intention to impose 25% tariffs on Mexican and Canadian imports, as well as to increase tariffs on Chinese goods, raises the specter of an inflationary escalation.
The uncertainty surrounding the implementation of these tariff measures and their potential impact on the economy raises questions about the possibility of stagflation. However, some economists believe that the immediate impact of the tariffs could be limited to a temporary price increase, similar to a sales tax increase.
The risk of stagflation exists if the tariffs lead to a series of price increases, prompting workers to demand higher wages and companies to raise prices continuously. Moreover, retaliatory tariffs from other countries could worsen the situation by causing layoffs and slowing economic growth.
Despite these uncertainties, it is important to emphasize that the current US economy is not yet facing the same challenges as those of the 1970s and 1980s. The unemployment rate, although it has risen this year, remains below the average of the last 50 years. Inflation has also declined over the last two years and is slightly above the Fed’s 2% target.
It is therefore crucial to carefully analyze the potential risks of stagflation and to remain vigilant regarding the economic policies put in place. The future of the US economy depends closely on the decisions taken by the authorities and on the reactions of other countries to US trade policies.