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- JPMorgan warned that today's economic situation could shift towards 1970s-era stagflation, characterized by high inflation and low growth.
- Such a situation would drive investors away from stocks towards fixed-income assets offering higher returns.
- JPMorgan says current geopolitical tensions have parallels to the 1970s and could similarly drive inflation.
The US economy is at risk of tilting towards stagflation, or a period marked by low growth and persistently high inflation, which would prompt investors to favor stocks over bonds, says JPMorgan.
The firm notes that we could be headed towards a stagflationary redux of the environment in the 1970s.