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Weighing the Risks of Inflation, Recession, and Stagflation in the U.S. Economy

The macroeconomic outlook continues to dominate the executive agenda. Last year, when demand overshot and supply chains sputtered, many firms discovered pricing power they never experienced before.

This research was published on June 10, 2022 in Harvard Business Review

The macroeconomic outlook continues to dominate the executive agenda. Last year, when demand overshot and supply chains sputtered, many firms discovered pricing power they never experienced before.

But the Fed’s battle against resulting inflation has pushed up the risk of recession. Today, macroeconomic fears are rotating out of inflation and towards another downturn. While the idea that a recession would put out the fire of inflation is persuasive, it is not guaranteed.