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🚨 US STAGFLATION RISK JUST GOT BIGGER.
Today, PCE and GDP data were released and it was a nightmare for the Fed and US economy.
US Q4 GDP (2nd est.) came in at 0.7%, its 2nd worst reading in 3.5 years.
Meanwhile, the Core PCE Price Index jumped to 3.1%, its highest level in 2 years.
This means US economic growth stalled while the risk of inflation rose.
And here's why this is concerning.
First of all, the world is currently experiencing its highest times of uncertainty since Covid.
The energy crisis is becoming a real thing, and people are losing their jobs.
This means the inflation situation is about to get even worse, and that's why the market only expects a max of 1 Fed rate cut in 2026.
On the other hand, AI continues to wipe out more jobs, which is now reflected in GDP data.
In an economy, when growth stalls and inflation goes up, it crumbles down really hard.
That's exactly what happened in the 1970s, which led to almost no return for the US stock market for an entire decade.
I'm not saying something similar will happen this time, but if the geopolitical situation doesn't resolve soon, things could get ugly for the markets.
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