Surprising stagflation

 

In one of the more surprising developments of the current trading environment, U.S. stocks remained near record highs on Thursday 

despite a sharper-than-expected increase in producer prices and a weakening labor market that is pointing to slowing economic growth

Thomas Salopek, the New York-based head of cross-asset systemic strategy at J.P. Morgan: 

“One of the things that has most people puzzled about the current environment is how we can be in a world of tariffs, as well as monetary-policy and trade uncertainty, and still have stocks at or near all-time highs when the world is moving in a stagflationary direction,” 

“We are not yet at stagflation,” he added. Our view is that things can be fine until you move into a recession.

If the economic growth rate goes from positive to negative, we could have a situation where basically nothing is safe and everything has to take a hit.”

Vivien Lou Chen Aug. 14, 2025 

https://www.marketwatch.com/story/why-tariff-driven-inflation-and-a-weakening-labor-market-havent-been-bad-for-u-s-stocks-8f5e00d1


The bad-news-is-good-news stock market

https://englundmacro.blogspot.com/2025/07/the-bad-news-is-good-news-stock-market.html


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