CHARLOTTE, N.C. — What is Stagflation? Let's connect the dots.
Anyone who's tried to buy a home recently knows the market is hot, pricey, and low on inventory. Now rising costs from inflation and supply chain issues are slowing homebuilders from throwing up as many new houses.
Bloomberg reports the combination of high inflation and stagnant output causes stagflation, and it's nothing new.
Stagflation existed during the 1970s.
Bloomberg reports there are two ways to fix it:
Increase the flow and supply of goods, or raise mortgage rates high enough to reduce demand, which will reign in prices.
The Federal Reserve has chosen the second way, already increasing the key interest rate with plans for more hikes this year.
But either option won't be a quick fix, stagflation is here to stay for a while.
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