WASHINGTON–When the Fed opted not to raise rates last his week after expressing concerns over lingering inflation—while also stating it sees strength in the economy—there is another word it “dreads” but also didn’t mention, according to a new report.

That word? Stagflation, an “an economic curse that is hard to escape.”

Stagflation is the term used for a combination of high inflation, stagnant economic growth, and high unemployment.

“Eager to soothe worried investors, businesses and consumers, the Fed urged caution about getting too worked up about its forecast, noting that inflation caused by tariffs may not be long lasting,” said CNN in an analysis released after the Fed adjourned this week. “Nevertheless, there’s no cocktail a central banker hates more than high unemployment mixed with high inflation.”

Wall Street Gets Jitters

The report noted that Wall Street has already begun to sound the alarm about stagflation, Fed Chair Jerome Powell has remained relatively “sanguine.” 

“But many market observers felt Fed officials’ new economic forecasts nevertheless gave off whiffs of stagflation,” the CNN analysis added, noting that according to officials’ latest median estimates, the U.S. unemployment rate may hit 4.4% by year’s end and inflation, as measured by the Personal Consumption Expenditures price index, could rise to 2.7%.

A ‘Far Cry’

In a note to clients earlier this week, JPMorgan chief US economist Michael Feroli said the projections “were revised in a stagflationary direction,” CNN reported. 

More optimistically, the report added, “If the Fed’s latest forecasts manifest, though, they’ll be a far cry from stagflation.”

The last period for stagflation in the U.S. was in the 1970s, with the economy only improving after a difficult recession.  As the report made clear, “We’re nowhere near those 1970s levels now.”