Stagflation is an economic period characterized by high inflation, slowing nominal growth, and weak employment. Although we now have high inflation as measured by the Core PCE, and nominal growth is likely to slow from peak, we do not view the current environment as “stagflation” because 1) long-term inflation expectations remain below levels experienced during the last two economic cycles; 2) Nominal GDP growth is strong; and 3) the Unemployment Rate is historically low and likely to trend even lower.

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