Ray Dalio says the U.S. is ‘certainly in a stagflationary period,’ and what the Fed does next could make or break the economy

American households are already feeling the squeeze of a slower, pricier economy, a situation some observers warn could quickly cascade into a full-blown stagflationary episode—one in which growth stalls and inflation stays sticky. The Federal Reserve’s next move could determine whether those voices are right.Recommended Video For many consumers, the economy already looks like stagflation. Inflation has remained stubbornly stuck between 2% and 4% since 2023, and the most recent reading (cataloging how much higher prices were in March compared to a year prior) was the highest inflation data point in two years, driven by rising fuel prices. Meanwhile, borrowing costs remain elevated, and wage gains are slipping, struggling to keep up with everything else getting more expensive.

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