The US economy may be barrelling towards stagflation, an outcome worse than recession

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• The first-quarter GDP report surprised investors with disappointing growth, while consumer prices kept rising.
• The provides the backdrop for stagflation, which can't be combated with rate cuts.
• The 1970s offer a warning of what could happen if inflation spirals out of control.

The latest GDP and inflation readings were what investors were least eager to see, and could hint at serious trouble ahead.