he U.S. economy could soon find itself stuck in stagflation — a dangerous mix of high inflation and rising unemployment — according to market experts.

Federal Reserve Chairman Jerome Powell faces a tough challenge: balancing price stability while maintaining strong employment. With the White House introducing new tariffs on major trading partners and jobless claims slowly increasing, Powell is caught between two difficult goals. If the Fed makes the wrong move, the U.S. could fall into stagflation, a condition that’s notoriously hard to fix.

Historically, when economic trouble hits, the Fed often steps in, cutting rates to boost the stock market and the economy. But in today’s uncertain environment, even the Fed seems unsure of its next step. So far, Powell and other officials are choosing to wait and see, hoping clearer trends emerge.

The situation has many economists concerned, drawing comparisons to the 1970s stagflation crisis, when oil price shocks led to both soaring inflation and unemployment. That era showed how stagflation can trigger a vicious cycle: businesses struggle with rising costs and shrinking revenues, leading to job cuts, weaker consumer spending, and worsening inflation.

If history is any guide, escaping stagflation will be no easy task — and it could spell major trouble for the stock market and the broader economy in the months ahead.