The Fiscal Drag Trap And Stagflation

Stagflation Conversations with Fexingo: High Inflation, Slow Growth, and 1970s Echoes · Sep 27, 2026 · 8m · transcript

With the ten-year breakeven inflation rate sitting at 2.34 percent and real GDP growth slowing to 1.50 percent, the United States is navigating a narrow path between persistent price pressures and economic stagnation. This episode examines how aggressive fiscal consolidation and debt reduction efforts in late 2026 are inadvertently creating a fiscal drag that suppresses growth while keeping inflation sticky. We explore the mechanics of this policy trap, why traditional central bank tools are losing their potency against sovereign balance sheet constraints, and what this means for investors…