As the outlook for growth continues to deteriorate, whilst the price for goods and services remain stubbornly high, the risk of stagflation returns. This would be a tough scenario, where policy options tackling one of these issues would only worsen the other.
The cyclical bull market in stocks and positive print on GDP has caused some on Wall Street and in D.C. to claim the recession has ended. A closer look indicates that neither believes its own rhetoric.
While Obama was in Illinois shoveling sand in bags to hold back the Bush-neglected infrastructure that was crumbling around him McCain was on his way to accept whoops and cheers from oil industry insiders.