Investing for stagflation: Bank of America’s Hartnett says we are in the first phase

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A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 17, 2021.

Andrew Kelly | Reuters

Stagflation is upon us, according to Bank of America global investment strategist Michael Hartnett.

The combination of stagnation and inflation is a rare period of low growth and rising prices.

Stagflation has come back on investors’ radar as many fear that the burst in post-pandemic activity could start to slow, while inflation may accelerate to high levels with an ultra-easy monetary policy in place.

During the 1970s, stagflation was first recognized when an oil shock and a depreciation in the dollar led to a simultaneous surge in price pressures and the unemployment rate.