The asking price is always higher than the bid price because brokers or market makers will always sell at a higher price (ask price) and buy from you at a lower price (bid price). Average spreads on the most liquid, major currency pairs such as the EUR/USD, and GBP/USD are very low, while they are higher for comparatively less liquid currency pairs. The prices of currency pairs are quoted in the bid and ask prices.

A Forex Trade In Action

Forex day traders can make anywhere from 1-5% of the total account each day. We have a great article on risk you can find here if you want to find the best risk management strategy. These books are particularly good if you are planning to start day trading in the UK, US, Canada and Europe.

What you should know before you start day trading forex

Yes – the foreign exchange market is arguably the best asset class to target as a day trader. Not only can you trade 24/7 at industry-leading fees, but forex attracts trillions of dollars worth of volume each and every day. Plus, when trading major forex pairs, you will benefit from super-low volatility levels.

• As a rule of thumb, you want to target the same amount of pips that makes up your determined range.
• Of course, nobody is immune to pressure and sharp market fluctuations can be stressful.
• This will help you analyze your performance and update your day trading strategy as needed.
• I also focus on features like fast trade execution and access to crypto markets.
• A mean reversion strategy tends to function best in choppy and volatile market conditions where swings in exchange rates occur around a central level.

Some of the best forex brokers offer a large variety of pairs, such as IG, Saxo, and CMC Markets. CMC Markets offers nearly 160 currencies and can even quote them both ways, allowing you to trade the EUR/USD and the USD/EUR. FOREX.com gives you direct access to global forex markets with low spreads, lightning-fast execution and powerful trading platforms—all under the regulation of the CFTC. Yes, it is possible to day trade forex, as the forex market operates 24 hours a day, allowing for frequent trades within a single day. Doing this analysis will help you set stop-losses and take-profit levels on each trade. If traders can identify a currency pair with a significant price change compared to its mean, they could take advantage of the market’s return to its average level.

Traders could implement strategically placed stop-loss orders to protect their positions if the price moves against them. A stop-loss order is placed at a predetermined level away from the current market price, which, once reached, automatically closes the position, limiting any further losses to a trader’s accounts. Range trading, sometimes referred to as channel trading, is a day trading strategy that starts with an understanding of the recent price action. It is a popular trading strategy where you buy and sell over a time frame of a single day’s trading with the intention of profiting from small price movements. Forex day trading can be profitable, but it is important to remember that it is also a risky activity.

How do I Choose the Best Broker for Day Trading Forex?

• I’ve traded stocks, like those on the TSX Venture Exchange, and they can be powerful tools.
• This means that there will often be wilder pricing spikes, so you might need to close a trade at a less favourable level.
• If you are S&P 500 day trading, you will be buying and selling the shares of companies, such as Meta and Apple.
• If a foreign currency is overbought, this means that there is too much upside pressure on the price of a pair, thus – a temporary market correction is likely.
• This allows you to boost the value of your stake, which in turn, can turn this little profitability into lucrative gains.

With that said, regulated brokers are capped in how much leverage they can offer retail clients. The good news is that major forex pairs attract much higher limits than other asset classes. With this in mind, the best time to trade forex is during standard market hours – which runs from 5 p.m. This takes into account the global nature of the forex trading arena, with the Asian markets opening proceedings and the week closing in the US.

Understanding the Basics of Day Trading

That said, even in the best conditions and with the most sophisticated technical analysis, sometimes the market will just move against you. Knowing when not to trade is often more important than knowing when to trade. In this situation, the exchange rate can snap back to its average level quite quickly. This movement provides a mean reversion trader with numerous opportunities for profitable trading during an active day. Some forex scalpers also employ forex robots to fully automate their trading plans. These levels could be seen as potential support and resistance levels, as well as possible entry and exit points where the market could reverse once reached.

Step #2 Start With Major Currency Pairs

The first type of professional day trader includes those who work for a hedge fund or the proprietary trading desks of large financial institutions, and they tend to trade forex profitably. After all, this often sees day traders place multiple positions throughout the day, and thus – not all will return a profit. On the contrary, losing a trade is just part and parcel of this industry. But, those that are experienced in the forex day trading scene know how to handle losses and move on. Opportunities for day traders can arise from any currency pair, regardless of whether they are a major or minor pair.

There are times when the markets are thin and liquidity is low – that can be a sign of uncertainty if the market is moving sideways and indecisive. Other times, it can be a precursor to a liquidity squeeze or abrupt move if large volumes suddenly start pouring in. If there is not enough liquidity to fill orders, the market will move to fill orders that may be resting above or below the current price. Top stories, top movers, and trade ideas delivered to your inbox every weekday before and after the market closes.

Major pairs

Depending on the day trading strategy you select, you might also find that the best conditions for trading tend to occur during certain time frames. Choosing the appropriate time frame or forex trading session to operate in can make a big difference in the day trading opportunities you can take advantage of as a forex trader. News trading is one of the most traditional, predominantly short-term focused trading strategies used by day traders. Fortunately, free courses for intraday traders starting out are frequently uploaded to YouTube. It involves exploiting small price gaps created by the bid-ask spread.

The platform – which is used by over 20 million traders, offers dozens of forex markets. This covers all major and minor currency pairs, alongside a huge selection of exotics. When day trading forex at this broker, you will not be charged any commission.

Many professionals recommend only actively trading for between two and three hours each day. Staying calm keeps my crypto trading focused and profitable without unnecessary risks or costs. Sticking to a trading plan takes Day trading forex discipline, but it protects your funds. I’ve felt those moments myself—refreshing charts, hoping for a bounce back that never came. For example, if I set a stop-loss at $10 below my entry price, I look for a target profit of $20 or more. Short-term gains add up when done right, but only with careful planning and tight stop-loss orders set beforehand.

And while it sold off its computer and server businesses, it’s now focused on cloud computing, cybersecurity, and consulting. Put another way, the best cybersecurity stocks to buy feature a very relevant profile, particularly for the U.S. economy. It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career.

Zscaler Business Overview

So Qualys is well-positioned among the best cybersecurity stocks. The company reported annual recurring revenue (ARR) of $813.2 million in 2024, up 30% on a year-over-year basis. The number of customers that generate more than $1 million in ARR grew by 67%, and the total customer base is now more than 2,800 strong.

Those revenue streams brought in $14.9 billion in the first quarter, up 25% from a year ago. Broadcom also produced net income of $5.5 billion in the quarter and earnings of $1.14 per share. We also offer real-time stock alerts for those that want to follow our options trades. You have the option to trade stocks instead of going the options trading route if you wish. It is an American government and military contractor that specializes in intelligence.

As a result, both government agencies and commercial enterprises must bolster their online security. However, the company’s recent investments in AI-led cybersecurity and constant progress in its other market segments make it a strong contender. Cybersecurity is essential for protecting the digital backbone of the global economy. As both private and public enterprises increasingly store sensitive information online, cyberattacks are becoming more frequent and sophisticated – and cybercrime is costing trillions globally. That’s driving steady demand for companies like these, which specialize in security software, threat detection, and incident response services.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium. Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink. Only time will tell if it can rebuild its reputation from here.

• Investing in cybersecurity stocks might just be a savvy strategy.
• We know that you’ll walk away from a stronger, more confident, and street-wise trader.
• Trading contains substantial risk and is not for every investor.

Top Cybersecurity Stocks To Watch

It also drew attention to the importance of reliable cybersecurity companies — and to the Cyber security stocks potential volatility of cybersecurity stocks. Customers use the platform to manage, troubleshoot and optimize their cloud-based IT infrastructure, including servers, applications and databases. The customer list includes Samsung, Shell, Deloitte, Comcast and Nasdaq.

Fortinet (FTNT)

CrowdStrike’s Annual recurring revenue (ARR) was $3.9B in Q2 2025, with a target of $10B ARR aimed for 2031. The risks are even higher when it comes to defense and geopolitics, with “cyber” now considered by military analysts as a new “fighting domain” alongside sea, air, land, and space. In its latest quarter, Palo Alto Networks supported 74 contracts at over $5 million, up 25% year over year. In early 2024, Palo Alto Networks (PANW, $190.43) CEO Nikesh Arora, introduced his “platformization” strategy. Tenable’s acquisition of Vulcan Cyber in February is a key strategic investment in exposure management. TotalAI handles the OWASP Top 10 most critical risks for LLMs, such as prompt injections, model theft, and the disclosure of sensitive information.

List of Cyber Security Stocks 2025

• However, its business performance since, as measured by revenues, cash flow margin, or client base, did not show any slowdown in growth, making a much better value proposition today than in 2021.
• The list of symbols included on the page is updated every 10 minutes throughout the trading day.
• The fund managed $797 million in assets in early 2025 and has an expense ratio of 0.5%.
• Below are the details on these three names that are seeing a broad-based improvement in sentiment on Wall Street.
• To add cybersecurity exposure to your portfolio, look for companies with strong growth records and improving profitability.

Its new data protection tools, which are designed to prevent private data leakage in public AI applications, are helping the company win large deals. As AI usage begins to accelerate, Zscaler’s new solution is well-timed. It is also entering the world of agentic AI, with solutions targeting both IT Operations and Security Operations. As cybersecurity threats continue to evolve, Zscaler looks well-positioned for the future.

Best Cybersecurity Stocks for Digital Protection (

Year-to-date daily total returns compare the total returns (increase in prices, dividends, and so on) on the day of writing with January 1, 2023. “Some are fine with that because they don’t want to deal with 25 different vendors,” Koujalgi says. “Others say they can’t compromise security.” But there are many companies in the first camp. Revenue in 2022 was $4.4 billion with a net income of $857.3 million, which has been growing since 2015.

A10 Networks (ATEN)

IBM also has an exceptional cash position, with free cash flow of $2 billion for the quarter. IBM’s offerings include enterprise security solutions to help businesses prepare for cyber threats, AI-powered cybersecurity solutions, and security consulting and management. CrowdStrike’s stock price has gone from approximately $80 to $210/share(up 162%) in the past year. On March 5, CrowdStrike completed its acquisition of Humio, which brings to CS a high-performance cloud log management and observability technology capability. The acquisition was for approximately $352 million in cash and $40 million in stock and options.

So, investors will want to pay attention to CrowdStrike’s ability to retain its initial advantage and grow abroad, despite mounting counter-attacks by its competitors also building more integrated platforms. Since then, CrowdStrike has changed its content update procedures to prevent similar incidents in the future. New updates will be rolled out slowly and not everywhere at once, and customers can now pick if they are early adopters of these updates, delay, or even opt out entirely. CrowdStrike’s revenues are highly predictable, with 98% gross retention of its user accounts.

At the same time, the total number of individual victims affected decreased by 16%, reflecting a shift from mass attacks to more targeted frauds and scams. Year to date total return was 15.3% and the yield is 0.10%, with a net expense ratio of 0.47%. Top holdings include VMWare, Fortinet, Science Applications International, Palo Alto Networks and ZScaler. Year to date total return was 18.0% and the yield is 0.33%, with a net expense ratio of 0.60%. Top holdings include Palo Alto Networks, Fortinet, Broadcom, Infosys and Cisco Systems.

Other bullish events include a weakening U.S. dollar, high inflation expectations, and greater demand for physical silver for industrial purposes. When these events occur, demand from buyers tends to outweigh supply from sellers, pushing the market price higher. Dealer markups in precious metals are no different than in any other business. Dealers have a cost of doing business that they must take into account, and then they must have some type of profit margin in order to stay in business.

Industrial Demand

Atkinsons Bullion & Coins accepts no responsibility for any losses based on information we have provided. Please carry out your own research before making an investment decision. When you buy from Atkinsons you are able to view and track all of your gold and silver purchases in one place. Rising interest rates, a stronger U.S. dollar, decreased industrial demand, and falling inflation expectations can encourage investors to sell silver (or kick buyers to the sidelines). As a result, supply outweighs demand, pushing the market price lower. You can get started with as little as $100 (our minimum purchase).

Once you advance to Checkout, your prices are locked in and displayed on the right side of the checkout form. These prices are final, and are held for 10 minutes while you complete the checkout process. If you take longer than 10 minutes to complete the checkout process, you will have the option to approve the new, updated prices to finalize your order. As such, the price of silver is the same whether quoted in the U.S. or Asia. The most important trading venues for silver are the New York Mercantile Exchange (COMEX), the Tokyo Commodity Exchange, the Chicago Board of Trade and the London Bullion Market. The silver traded on the stock exchange is worth around 17 million US dollars in total.

Use the table to the right to discover the silver price today in ounces, grams, and kilograms. Bookmark this page to receive accurate and up-to-date gold silver prices information. The spot price of silver is the cost of one troy ounce of silver at that particular second. However, the silver spot price is not the actual or exact price of a .999 fine ounce of physical silver bullion. Silver bullion dealers add a slight premium to the spot price to ensure profitability. Our physical silver bullion prices are updated continuously to reflect the current rate of silver on the market, as well as our dealer premium.

When looking at silver as a long-term investment, however, we believe that the day-to-day or even month-to-month fluctuations in silver prices should not be the area of focus. We are more concerned with the long-term trend in silver, as well as the potential protection that physical silver ownership may provide. There are no margin calls to be met or additional money to be added to hold it (outside of any storage costs etc).

What is the Price of Silver?

Many investors use a cheap silver bullion online search to find fractional or circulated options at lower premiums. This premium varies by product, so a quick cheap silver bullion comparison can help ensure you’re paying the lowest markup. Physical silver has a cost to procure, manufacture and distribute, which is why you cannot typically purchase silver for the silver spot price. Not only do we provide the live silver spot price, but we also offer a full 24-hour silver price chart to help make faster investment decisions.

• Explore the potential future value of your portfolio at various spot price scenarios.
• These are agreements between buyers and sellers on the precious metals market.
• Our interactive silver price chart above allows you to view prices for a wide range of periods and custom date ranges.
• We offer a wide range of 1 oz and even fractional ounce silver products that start as low as $3 per piece.

The actual delivered cost becomes $360.40, or $36.04 per ounce—20% above the spot price. Electronic platform operating 23 hours daily with futures contracts representing 5,000 troy ounces each, providing continuous price discovery. If you are looking to acquire as much silver as possible, then you may want to try and buy silver products as close to the spot price as possible.

There is plenty of information available online for one to research and try to draw his or her own conclusions. On the other hand, the denomination has no bearing on the coin’s market value. The face value has no impact on a coin’s appeal as a collectible. The difference between the bid and ask price is known as the dealer spread. The premium for a numismatic coin may be much higher than the intrinsic value of its silver weight.

Silver Bars

The total level of supply and demand for silver at any given moment determines the price. Prices take into account all market conditions that can affect supply and demand. During the 2008 financial crisis, for instance, silver prices skyrocketed from under $10 per ounce in 2008 to nearly $50 per ounce by 2011. Similarly, in 2020, uncertainty caused by the COVID-19 pandemic sent silver prices soaring alongside gold. As an investment, silver is used similarly to gold, as a hedge against the devaluation of fiat currencies. The following short video covers the silver supply-demand fundamentals and the most significant reasons millions of investors are buying silver bullion today.

Buyers Guides

Mexico produces nearly 25% of global supply, making geopolitical stability crucial for consistent market flow. When you’re ready to track these price movements in real-time, you can monitor current silver spot price charts that update continuously during market hours. The silver spot price fluctuates constantly based on trading activity from marginal buyers and sellers. Retail investors cannot purchase silver at the “spot price” because dealers and brokerage firms always charge a premium or commission over spot. Taking delivery on a silver futures contract involves additional fees and costs and one is limited in the product type.

• As such, the price of silver is the same whether quoted in the U.S. or Asia.
• When analyzing silver investing options, you’ll no doubt come across intangible silver investment options.
• Silver’s price therefore responds not only to investment sentiment but also to manufacturing trends, technological developments, and economic growth forecasts.
• They publish their buyback prices openly, allowing customers to understand the full bid-ask spread before purchasing.

World Silver Prices

Success in silver investing requires balancing multiple factors including premium levels, product liquidity, dealer reputation, and total delivered costs. The silver spot price emerges from a complex network of global trading activity rather than being set by any single entity. These futures contracts, typically representing 5,000 troy ounces each, drive price discovery through high-volume trading that reflects real-time supply and demand dynamics. They publish their buyback prices openly, allowing customers to understand the full bid-ask spread before purchasing.

Live silver prices are set by market participants in major commodity market trading centers including Tokyo, London and New York. Silver prices are updated each minute so that you’re always getting the latest silver prices. These products come with a substantial collectible premium over the spot price. Items such as old numismatic investment manager job description coins and graded coins fall under this category.

SELLING YOUR PRECIOUS METALS

Spot silver prices represent the value of a unit of raw silver for immediate delivery. Unlike futures prices, it is the live silver price today in real time. Consider purchasing ten one-ounce silver rounds when spot prices trade at $30. A dealer quoting $3.50 premiums would show a $33.50 per ounce price, totaling $335 for ten ounces. Credit card processing adds 4% or $13.40, while shipping might cost $12 for this order size.

However, stagflation disrupts this pattern, presenting a perplexing paradox that demands innovative solutions from central bankers and policymakers. Stagflation emerges when inflation surges or rises significantly, economic growth decelerates, and unemployment maintains a persistently high level. This scenario poses a challenge for economic policymakers, as efforts to reduce inflation might worsen the unemployment situation. Financial experts worry they will drive up prices, lowering consumer spending that accounts for most of the country’s economic activity. At the same time, tariffs bring increased uncertainty that can stifle investment and prompt layoffs as businesses are unsure of how to plan for the future. The oil price shock theory of stagflation says that when oil prices suddenly skyrocket, economies aren’t able to keep up.

But stagflation never arrived, and McMillan isn’t worried about another episode happening any time soon. He says that’s because the economy is fundamentally different today than it was back then. While the U.S. has sidestepped another bout of stagflation since the 1970s, some commentators have drawn parallels between that episode and recent dynamics in the economy. Modern economics can be described only slightly tongue-in-cheek as a continuous battle over the causes of the stagflation of the 1970s. With two decades of business and finance journalism experience, Ben has covered breaking market news, written on equity markets for Investopedia, and edited personal finance content for Bankrate and LendingTree.

Experts say that such periods of sustained, high inflation are most likely caused by either a global supply shock or poorly-guided economic policies. Simplying a lot, the standard view since Volcker has been to take the Phillips curve and add in the monetarist view of inflation expectations. In fact, this is the trap Volcker thought the U.S. found itself in during the late 1970s. Worryingly, the potential stagflation of the mid-2020s would occur in an economy with much higher debt levels and lower interest rates than in the 1970s, limiting the policy options available to governments and central banks.

Unemployment and Its Impact

If you look at the U.S. data, you can see a clear trend from 1972 to mid-1975 with inflation really going up. At the same time, the unemployment rate was spiking and GDP growth was declining. That was defined by economists at that time as the process of stagflation, which can be very damaging for individuals, firms, and the market in general. It was called that because it’s a mixture of stagnation—high unemployment rates, low incomes, low or negative gross domestic product (GDP) growth—and inflation, a higher-than-average rate of price changes. Stagflation challenges traditional economic models that rely on the Phillips curve, where inflation and unemployment are expected to have an inverse relationship. According to classic theory, high inflation should coincide with low unemployment and vice versa, simplifying control through interest rate adjustments.

Supply shock

• This article is based on current events, research, and developments at the time of publication, which may change over time.
• Stagnant growth and high inflation can do great damage to an economy and leave scars for years to come.
• These imbalances hinder economic growth while amplifying inflationary pressures.
• You can connect with her on Twitter, Instagram or her website, CoryanneHicks.com.
• A commodity price spike high enough to trigger stagflation could come from the demand side instead of the supply side.
• Inflation is a complex economic phenomenon marked by a prolonged escalation in the overall price levels of goods and services within an economy over a specific period.

It’s also revising economic projections to reflect slower growth and higher inflation through 2025. Santangelo said the goal is not to contribute to either inflation or recessionary pressures, so much as to steady the economy. Effectively managing this extreme inflation poses challenges due to the inherent trade-offs. Tightening monetary policy to rein in inflation can inadvertently dampen economic expansion, possibly leading to escalated unemployment. Financial experts worry the tariffs will slow the economy and increase inflation, leaving the Fed in a difficult position.

Connect with your Ameriprise Financial advisor

• That was defined by economists at that time as the process of stagflation, which can be very damaging for individuals, firms, and the market in general.
• Achieving equilibrium demands a nuanced approach since measures designed to tackle one aspect could aggravate the other.
• In its June 2022 global economic forecast, the World Bank warned that the risk of stagflation has risen due to a “sharp slowdown” in global economic growth coinciding with a “steep” rise in the rate of inflation to multi-decade highs.
• Fixed-income investors can turn to shorter-duration bonds and Treasury inflation-protected securities (TIPS), which adjust their principal to match inflation, to minimize the impact of rising inflation.
• The roots of inflation can be traced to various causes, including heightened demand, scarcity in supply, and variations in production costs.

Nevertheless, there’s no cocktail a central banker hates more than high unemployment mixed with high inflation. When weighing big purchasing decisions—like a car, for example—consider whether you can defer or delay the purchase of items where prices may be temporarily elevated, he adds. Whether or not the U.S. will experience another bout of stagflation remains to be seen. Haworth says that investors have been battling two headwinds—high inflation and rising interest rates—that don’t necessarily create a clearcut path for investing. Economists have been puzzled by the data in recent years, which suggests that significant drops in unemployment won’t necessarily lead to the same increases in inflation that the traditional Phillips curve would predict. Conversely, increases in unemployment haven’t resulted in as much of a decrease in inflation as they once did.

Investing in a single asset carries concentration risk, while frequently adjusting holdings can increase market timing risk. Endowus advocates for a disciplined, long-term strategy based on sound investment principles. Stagflation is often considered worse because it presents a complex challenge for policymakers.

Poorly made economic policies

Keep in mind, though, that each case of stagflation is caused by a unique set of domestic and international circumstances. Even during challenging times, maintaining a globally diversified portfolio across various asset classes ensures investors benefit from the market’s long-term upward trend, which is an inherent reflection of global economic expansion. When both slow growth and high inflation are present, officials are left to decide which factor is more problematic. Interest rate policies are not designed to address both problems at the same time.

Why Is Stagflation Bad for the Economy?

Stagflation occurs when high inflation coexists with stagnant economic growth and high unemployment. In contrast, a recession is characterised by a significant decline in economic activity, output, and employment. Even before the U.S. attack on Iran increased economic uncertainty, economists predicted it would decline again, leading to stagnant economic growth or even a recession. Property, a tangible asset, acts as a robust shield against stock market fluctuations in stagflation.

The Resale Economy: From Fast Fashion to Circular Markets

Coryanne Hicks is an investing and personal finance journalist specializing in women and millennial investors. Previously, she was a fully licensed financial professional at Fidelity Investments where she helped clients make more informed financial decisions every day. She has ghostwritten financial guidebooks for industry professionals and even a personal memoir. She is passionate about improving financial literacy and believes a little education can go a long way.

Stagflation refers to an economy characterized by high inflation, low economic growth and high unemployment. Unlike typical recessions or periods of high inflation, stagflation defies conventional economic solutions because addressing one aspect typically worsens the others. While true stagflation remains uncommon, concerns about its potential resurgence have grown this year, with the US tariff situation. Factors such as supply chain disruptions, geopolitical tensions, and unprecedented monetary policies have contributed to inflationary pressures and economic uncertainty, raising fears of a stagflationary environment. We believe that over the next several quarters, economic growth is likely to slow amid higher prices. Inflation should begin to see upward pressure from higher import prices in May, coming off a four-year low of 2.3% in April.

Bad policy, of course, can also have disastrous economic effects, including stagflation. One key risk arises when fiscal policy (government spending and taxation) clashes with monetary policy (actions by the central bank). Stagflation is often caused by the supply shocks leading to the fall in aggregate supply. Such shocks can include sudden increase in oil prices, natural disasters, or geopolitical events that disrupt trade flows. For example, the oil crisis of the 1970s resulted in a sudden rise in oil prices, leading to a period of stagflation in many economies. Stagflation is generally considered more difficult to resolve than standard inflation or a recession.

Broadly speaking, the Fed lowers interest rates to strengthen a weak economy and raises interest rates forex for dummies, forex for beginners, forex market basics to fight inflation. Before 1970s, it was believed that the governments cannot simultaneously achieve lower inflation and lower unemployment. Yet, in 1970s, this classical notion of the trade-off between inflation and unemployment was put aside by the phenomenon of stagflation where high inflation and high unemployment were there simultaneously. In 1958, a New Zealand economist, Professor William Phillips, proposed the Phillips Curve, which shows a trade-off between the unemployment rate and the inflation rate over a period of time.

In contrast, stagflation combines high inflation with stagnant economic growth and high unemployment—a more challenging scenario for investors. The concept of stagflation, a phenomenon comprising stagnation, high inflation, and high unemployment, operates through interconnected economic forces. In a slow-growth economy, high unemployment ensues, leading to reduced wages due to increased job seekers. Simultaneously, inflation drives up the prices of goods and services, diminishing consumer purchasing power.

This fear arose in response to the Fed’s expansionary monetary policy, which had been used as a strategy to respond to the 2008 financial crisis. Meanwhile, in the United Kingdom during 1974, there was a 25 percent increase in inflation along with not only minimal but negative GDP growth. This situation was produced by the tail end of the Barber Boom (itself created by the 1972 budget of Conservative politician Anthony Barber) as well as the increase in oil prices, as was the case in the United States. Low rates of unemployment tend to compensate for some of the pain that high levels of inflation bring because businesses generally can only raise prices when people are earning enough to afford it.