Obama Economist: Stagflation Mega Threat

Thomas Hoenig, the former Kansas City Federal Reserve president, weighs in, arguing that a ‘recession is a fair call.’ The danger of the U.S. economy returning to a 1970s-style stagflation scenario is the highest it’s been in decades, according to former President Barack Obama’s top economic adviser. Jason Furman, a Harvard University professor who previously served as chair of the Council of Economic Advisers, warned that an aggressive Federal Reserve, rising interest rates and persistently high inflation have raised the possibility of a period of stagnant economic growth and high consumer prices.“It’s a real risk,” Furman said during an interview with FOX Business. “It’s the biggest risk of stagflation we’ve had in a long time. But it’s not a guarantee that the economy goes into recession. Consumers still have a lot of money. They’re still spending. So there’s still some hope for the U.S. economy.“Stagflation is the combination of slowed economic growth and high inflation, characterized by soaring consumer prices as well as high unemployment. The phenomenon ravaged the U.S. economy in the 1970s and early 1980s, as spiking oil prices, rising u …