Chronology·7 articles·2025 – 2026
Stagflation: Risk Assessment, Impacts, and Investment Strategies in the Face of a Growing Economic Threat
Updated 2026-04-01·Source: MoneyRadar Briefs, Notes, Reports & Videos
MoneyRadar's publications analysis between June 2025 and April 2026 reveals a gradual evolution and intensification of global stagflation fears. Initially, in June 2025, the specter of global stagflation seemed to recede thanks to trade truces, although the risk persisted in the United States due to a slowdown in production and a slight rebound in prices. However, by September 2025, the threat materialized, with the United Kingdom already in stagflation since 2023, and the United States flirting with this scenario due to Donald Trump's trade policies and a concerned Fed facing persistent inflation and declining employment. The risk of stagflation, defined by sluggish growth and high inflation, continued to weigh on markets. In October 2025, the search for investment opportunities turned towards sectors with "pricing power" to withstand this uncertain environment. The end of 2025 saw the United Kingdom cited as an example of "true stagflation" in the past, but with potential for recovery. The beginning of 2026 marked a major turning point with the war in Iran, which revived and amplified the risk of stagflation on a global scale. In March 2026, this conflict was identified as a key factor in the "resurgence" of stagflation, heavily impacting emerging markets and weakening Europe. In April 2026, the first effects of the war were concretely felt, with a contraction in activity and rising costs in Europe, and impacts on industry and gasoline prices in the United States, confirming the magnitude of the stagflation scenario and calling for great investor caution.
The War in Iran Revives Stagflation Risk and Imposes a New Investment Playbook
The conflict in Iran strongly reactivates the risk of global stagflation, characterized by rising inflation and falling growth, requiring immediate adjustments to investment portfolios.
The War in Iran Intensifies the Stagflation Scenario in Europe and the United States
The war in Iran amplifies the stagflation scenario, with increasing impacts on economic activity and inflation in Europe and the United States, making markets uncertain and requiring great caution.
Methodology
Assessment of the sensitivity of major economies (US, Europe, Japan, China, India) to the energy shock and geopolitical tensions, analysis of activity indicators (PMI, ISM) and price indicators (gasoline, inflation) in Europe and the United States.
Key findings
- The stagflation scenario is gaining momentum due to the war in Iran.
- Europe is experiencing the first effects with a risk of activity contraction and rising costs, with inflation being re-evaluated upwards for 2026-2027.
- The United States is impacted by delivery delays and rising prices paid in industry, as well as by increasing gasoline prices, but its activity remains resilient.
- The VIX (fear index) has risen but has not yet reached extreme levels, suggesting that the worst is not yet "priced in".
- The Fed could paradoxically be pushed to cut rates if growth deceleration intensifies.
Investor implications
Remain cautious on equity markets, do not rush to buy back indices, and consider lightening European positions while strengthening US bonds.
The Specter of Stagflation Recedes Globally but Persists in the United States
The trade truce has temporarily averted the risk of global stagflation, but the United States remains vulnerable to this scenario due to slowing production and rising prices.
Stagflation: A Growing Threat in the United States and its Strategic Implications
The risk of stagflation, defined by sluggish growth and high inflation, is rising in the United States, primarily due to Donald Trump's policies, requiring an adjustment of investment strategies.
Stagflation Fears Persist in the United States Without Intensifying
Although the United States continues to flirt with the risk of stagflation due to inflation and slowing employment, the US economy is expected to resist thanks to sustained consumption.
Investment Opportunities in a Stagflation Risk Environment
In an uncertain environment marked by stagflation risk, investors should favor sectors and companies capable of maintaining their profits through their "pricing power".
The United Kingdom, Stagflation Laboratory in 2022, Shows Signs of Recovery
The United Kingdom went through a period of "true stagflation" in 2022, but a "re-rating" is expected for 2026 thanks to improved investor perception and historically low valuation.