The Stagflation Trap — US Fed Holds Rates as Global Economy Enters a Dangerous No-Man's Land

The US Federal Reserve has held rates at 3.5%-3.75%, paralyzed by a combination of rising energy inflation (from the war) and zero private-sector job growth. This is economic stagflation — inflation AND stagnation simultaneously — a scenario economists have not seen at this scale since the 1970s oil shock.

Stagflation in the world's largest economy directly impacts Ghana: it erodes purchasing power of Ghanaian exports, weakens commodity prices for non-energy goods, and makes international credit more expensive. Ghana's landmark BoG rate cut this morning is being announced into an incredibly hostile global financial environment.