First, it was inflation. Then, slowing growth. Now? Stagflation is creeping in—and Wall Street is paying attention. The Wall Street Journal, Bloomberg, CNBC—they’re all sounding the alarm. And when the big dogs talk, markets listen.

The signs aren’t subtle. Hiring is slowing. Manufacturing is slipping. Recession whispers are getting louder. Yet, Wall Street is still eyeing S&P 5,500 and 6,000. But let’s be real—confidence is hanging by a thread.

Stagflation is the worst of both worlds: sluggish growth and rising prices. And the usual Fed playbook? Practically useless here. Apollo’s chief economist Torsten Sløk nailed it: “A trade war, by definition, is a stagflation shock—higher prices, lower sales”.

Under Biden, the Fed jacked up rates, then eased off when the economy held up. Under Trump 2.0? Rate cuts are likely coming—but not as a celebration. More like a lifeline to stop the bleeding. Meanwhile, tariffs are back, pushing prices even higher.

The Fed is in a chokehold. Cut rates, and inflation runs hotter. Hold firm, and growth tanks. Trump’s team teases tariff compromises, but he’s doubling down next month. Uncertainty is the only certainty.

His playbook? Reshaping global trade to “make America rich again”—even if it shakes the economy temporarily. But with the Fed stuck and the White House stirring the pot, where’s the upside for investors? There are plenty of strategies for gains in any market conditions - stay connected to The Wealth Effect newsletter and our social media links below to follow our path through it all.

The market is a mind game. If businesses and consumers expect stagflation, they tighten up. Less spending, less hiring, and boom—it becomes a self-fulfilling prophecy. Stagflation isn’t fully here yet, but talking about it might be enough to bring it to life.