Wall Street Week Ahead: US consumer price data to test feared stagflation scenario

Stagflation fears are on the rise as the US struggles to contain inflation without hurting economic growth, which could leave investors with fewer options for return on investments. Investors are concerned that persistently high levels of inflation combined with stagnant growth could dim the appeal of both equities and bonds. While unlikely, the threat has loomed large as last year’s inflation rate surge forced the Federal Reserve to launch an aggressive monetary policy tightening cycle, stoking fears of a looming recession. Investors await data that shows whether the central bank’s interest rate increases have curbed inflation and not hurt growth before determining their investment strategies.