Stagflation problem for the Fed?

The Federal Reserve faces a problem that the United States has not seen for many years: stagflation.

New inflation data and the Fed's own forecast for economic growth, both released yesterday, make for some uncomfortable reading.

The Labor Department announced that consumer prices rose by 4.3% in January, compared with a year earlier.

This was followed by an acknowledgement by Fed officials that they had reduced their forecast for growth this year to between 1.3% and 2%, and that unemployment was

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