“The combination of activity stagnation and price increase introduces the possibility of stagflation,” the firm pointed out.
Given the imposition of tariffs by the Donald Trunp government, Vanguard warns that despite the negotiations, the fact that the United States has a tariff rate below 20% will have “important economic consequences.”
The firm added that there is a strong possibility that the United States is aimed at a recession and that the underlying inflation is above 4%.
The United States protectionist policies will also imply that unemployment rises above 5% at the end of the year, the highest rate than a decade.