Stagflation Concerns Rise as U.S. Economy Faces Tariffs and Slowdown

On March 5th, COINOTAG News reported that U.S. President Trump is taking steps to implement tariffs on both Canada and Mexico. According to Moody’s Chief Economist Mark Zandi, these measures could lead the U.S. economy toward the troubling scenario of stagflation. Recent economic indicators reveal growing apprehension among U.S. consumers and businesses alike, prompting a significant pullback in spending. Analysts warn that this could culminate in an economic slowdown, with inflation pressures potentially driving the U.S. into stagflation for the first time in half a century. The Atlanta Fed’s GDPNow model predicts a contraction of 2.8% in the U.S. GDP for the first quarter, marking the first decline since Q1 2022. In response to these economic challenges, the Federal Reserve might consider elevating interest rates, reminiscent of former Fed Chair Volcker’s aggressive rate hikes during the 1980s to control inflation.