Joseph Stiglitz Warns US Faces High Risk of Stagflation

Nobel Prize-winning economist Joseph Stiglitz warned on March 16, 2026, that the United States faces a high risk of stagflation. Speaking in Geneva, Stiglitz stated the U.S. economy was already vulnerable to a combination of high inflation and stagnant growth prior to the outbreak of war in the Middle East on February 28.

The economic instability follows strikes on Iran by the United States and Israel, which prompted Iran to choke off the Strait of Hormuz. This action caused global oil prices to surge by 40 to 50 percent. Stiglitz noted that the U.S. was already weakened by rising unemployment and stagnant labor force growth in 2025.

Stiglitz argued that the tariff policies of President Donald Trump and a weakening dollar are further exacerbating inflationary pressures. He characterized current U.S. growth as unbalanced, driven primarily by artificial intelligence data centers while the broader stock market languishes. In contrast, he noted that European nations are receiving a growth stimulus from increased defense spending after Washington signaled that these nations cannot depend on the U.S. for their defense.