Is the world economy heading towards stagflation in 2022?

The US had its highest inflation rate in 40 years last month, and the US Bureau of Economic Analysis released its first estimate of Q2 GDP growth last week, which came in at -0.9 percent.

With officially negative GDP growth in Q1 and Q2, the United States has met the generally accepted criteria for a technical recession, i.e. two consecutive quarters of negative GDP growth.

When combined with the 40-year high inflation rate reported for June, we can reasonably conclude that the United States is currently experiencing stagflation. Will the rest of the world lag behind the United States? Prepare yourself for stagflation, something we haven't seen since the 1970s.

It's high time to review and rebalance that investment portfolio.

Investors may want to refer to this useful article by Capital.com which describes the asset classes that tend to perform well in a stagflationary environment, as well as the strategies that have worked well in the past.