The Economic Times

Financial Word of the Day Stagflated: meaning, usage, and why it matters in todays economy

Financial Word of the Day: Stagflated describes an economy where inflation stays high while growth slows at the same time. Prices rise, but incomes do not keep up. Consumer demand weakens. Job creation slows. Normally, inflation falls when growth cools, but stagflation breaks that pattern. This traps central banks. Raising rates hurts growth. Cutting rates worsens inflation. Markets fear stagflation because stocks struggle, costs remain high, and uncertainty rises.