{"id":1491708,"date":"2022-05-25T13:15:39","date_gmt":"2022-05-25T17:15:39","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1491708"},"modified":"2022-05-25T13:15:42","modified_gmt":"2022-05-25T17:15:42","slug":"economy-on-the-cusp-of-stagflation-seen-under-jimmy-carter-warns-asset-management-exec","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/economy-on-the-cusp-of-stagflation-seen-under-jimmy-carter-warns-asset-management-exec\/","title":{"rendered":"Economy \u2018On The Cusp Of\u2019 Stagflation Seen Under Jimmy Carter, Warns Asset Management Exec"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Feconomy-on-the-cusp-of-stagflation-seen-under-jimmy-carter-warns-asset-management-exec%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1491708&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>Bridgewater Associates co-CIO Bob Prince said on Tuesday he believes the economy is \u201con the cusp of\u201d stagflation during an interview at the World Economic Forum in Davos, Switzerland.<\/p>\n<p>The term \u201cstagflation\u201d refers to sluggish economic growth coupled with high inflation \u2014 and is especially characteristic of the economy of the late 1970s, in which an oil shock that occurred under the leadership of President Jimmy Carter induced a recession amid rising price levels.<\/p>\n<p>When asked by <a href=\"https:\/\/www.youtube.com\/watch?v=02d1R8ZOJ7g\">Bloomberg TV<\/a> if he believes stagflation will hit the United States, Prince responded \u201cwe\u2019re on the cusp of it\u201d \u2014 and argued that the bond market has not properly recognized the threat. After being pressed on the timing of the stagflation, Prince appeared to avoid making a prediction.<\/p>\n<p>\u201cThe markets are under-discounting the inflation picture,\u201d Prince explained during the interview. \u201cThe sustainability, the self-reinforcing of the inflation is not discounted. The degree of tightening over time is not discounted.\u201d<\/p>\n<p>However, Prince said that the banking system has the most \u201clow-risk asset portfolio in ages\u201d because newly-printed money led to higher deposits, which banks used for stable investments such as Treasury bonds.<\/p>\n<p>\u201cEven if the Fed tightens, the banking system can sustain the flow of credit into the economy, and household balance sheets are much better than they\u2019ve been in decades,\u201d Prince remarked.<\/p>\n<p>In an effort to curb inflation, the Fed <a href=\"https:\/\/www.dailywire.com\/news\/the-fed-jacks-key-rate-up-half-point-as-inflation-surges\">increased interest rates<\/a> by a half-point earlier this month \u2014 which marked the largest rate hike since May 2000 and followed a quarter-point increase from near-zero levels two months ago.<\/p>\n<p>Alongside Prince, other investors \u2014 including Pershing Square Capital Management CEO Bill Ackman \u2014 are <a href=\"https:\/\/www.dailywire.com\/news\/top-hedge-fund-manager-sees-two-ways-out-of-soaring-inflation-and-neither-one-is-pretty\">wary<\/a> about soaring inflation. \u201cIf the Fed doesn\u2019t do its job, the market will do the Fed\u2019s job, and that is what is happening now,\u201d Ackman argued on Tuesday.<\/p>\n<p>\u201cThe only way to stop today\u2019s raging inflation is with aggressive monetary tightening or with a collapse in the economy,\u201d Ackman continued. \u201cThere is no prospect for a material reduction in inflation unless the Fed aggressively raises rates, or the stock market crashes, catalyzing an economic collapse and demand destruction.\u201d<\/p>\n<p>Though a stock market crash is by no means desirable, an aggressive rate hike would increase the <a href=\"https:\/\/www.dailywire.com\/news\/the-federal-reserve-just-raised-interest-rates-how-will-it-impact-your-family\">cost of borrowing money<\/a> \u2014 likely slowing economic activity as a result.<\/p>\n<p>Ackman condemned \u201cvarious current and former Fed members\u201d refraining from an aggressive stance on inflation over the past few days. Atlanta Fed President Raphael Bostic affirmed on Tuesday, for example, that the central bank should <a href=\"https:\/\/www.marketwatch.com\/story\/fed-cant-be-reckless-in-the-way-it-pushes-up-interest-rates-bostic-says-11653410349\">exercise caution<\/a> while raising rates.<\/p>\n<p>\u201cThe Fed has already lost credibility for its misread and late pivot on inflation,\u201d Ackman asserted. \u201cCurrent Fed policy and guidance are setting us up for double-digit sustained inflation that can only be forestalled by a market collapse or a massive increase in rates.\u201d<\/p>\n<p>Meanwhile, President Joe Biden is <a href=\"https:\/\/www.dailywire.com\/news\/biden-sounds-off-on-whether-he-thinks-another-recession-is-inevitable\">portraying optimism<\/a> about the state of the economy. During a press conference earlier this week, a reporter pressed Biden on \u201crecord-high inflation\u201d and \u201cenormously high gas prices\u201d in the United States.<\/p>\n<p>\u201cShould Americans be prepared for a recession? In your view, is a recession in the United States inevitable?\u201d the reporter asked. Biden replied \u201cno\u201d before listing gains in employment and a handful of large foreign projects in the United States, among other phenomena.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bridgewater Associates co-CIO Bob Prince said on Tuesday he believes the economy is \u201con the cusp of\u201d stagflation during an interview at the World Economic Forum in Davos, Switzerland. The term \u201cstagflation\u201d refers to sluggish economic growth coupled with high inflation \u2014 and is especially characteristic of the economy of the late 1970s, in which &#8230;<\/p>\n","protected":false},"author":99,"featured_media":1491733,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1491708","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1491708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1491708"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1491708\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1491733"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1491708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1491708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1491708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}