Stagflation, recession, unemployment: predictions of the best economist in Apollo

The United States has flirted with The word feared For a large part of this year, and it is not yet out of the woods.

It is according to Torsten Sløk, the chief economist of Apollo Global Management, who thinks that the United States is at a critical inflection point for stagflationA disastrous scenario in which economic growth slows down while inflation remains high.

This problem is often considered even more difficult for political decision -makers recessionBecause higher inflation can prevent the federal reserve from reducing interest rates to stimulate the economy.

The scenario was widely launched by President Donald Trump priceSløk wrote in a white paper published Monday.

“Price hikes are generally Stagflationary shocks – They simultaneously increase the probability of an economic slowdown while exerting upward pressure on prices, “wrote Sløk, adding that Wall Street consensus forecasts for economic growth had derived later this year, while inflation forecasts increased.

“This is the definition of stagflation,” he added later.

Here are four predictions that Sløk makes for the American economy in the current environment:

1. GDP will be more than half of its peak last year

GDP Growth will most likely be slowed down to around 1.2% in 2025, said Sløk. This reflects economic growth reduced by more than half compared to its peak in the third quarter of 2024, when GDP increased by 3.1% from one year to the next.

GDP decreased by 0.3% in the first quarter of 2025, estimates the Bureau of Economic Analysis, the first time the US economy has been contracting since 2022.

2. Inflation will remain above average in 2025

Inflation will probably hover about 3% by the end of the year, the Apollo forecasts.

The firm said it was a “significant increase” compared to its previous forecasts, which struck inflation at around 2.4% before Trump announced his radical rates in April.

3. Unemployment will increase until 2026

The unemployment rate in the United States will continue to resume at least the next 18 months. Apollo believes that unemployment could drop from 4.2% to 4.4% in 2025 and check up to 5% or more in 2026.

Admittedly, Apollo’s forecasts for end -of -year unemployment are still historically weak, but the increase in unemployment has historically been linked to periods when the economy has experienced stagflation.

When the United States has seen Stagflation in the 70s And the 1980s, the unemployment rate culminated at around 9% in 1975, before cooling and switching to another 10.8% peak in the early 1980s, according to the Bureau of Labor Statistics.

4. The economy could still face a recession this summer

Apollo fixed the Recession Over the next 12 months at 25%. Before Trump’s prices, the company did not provide a recession at all this year, said Sløk.

Sløk continued to note that there was still a risk that the economy could enter a recession As of this summer, referring to his thesis of “resetting resetting voluntary trade”, he for the first time floated while the prices moved in force earlier this year.

The idea implies that the economy entering a recession this summer, because prices cause shipments to American ports and trucking demand for slowdown, leading to empty shelves and the drop in sales for businesses.

The scenario is still a risk, said Sløk, adding that the effects of Trump’s liberation day prices “were still working through the commercial pipeline”.

Sløk has always warned of stagflation and a recession in recent months, although most of Wall Street forecasters generally expect the economy to avoid a slowdown this year, especially since the United States continues to progress on trade negotiations.