Stagflation Warning: 3 Smart Money Moves to Make Now

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In a week full of economic uncertainty — and a little political spice — President Donald Trump called Federal Reserve chair Jerome Powell a “major loser,” pressuring him to cut interest rates ASAP.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. But Powell’s in a tough spot. Cutting rates too soon could fuel more inflation. And keeping them high could slow the economy down further.Throw rising unemployment into the mix, and it raises a scary question: Are we heading toward stagflation?What is stagflation?High inflation + rising unemployment + slowing economy = stagflation.Basically it’s when prices go up, jobs go away, and the economy moves in slow-mo. It’s an economic worst-case scenario — and it really hurts everyday people like you and me.The last time the U.S. really dealt with this was back in the 1970s — and it wasn’t pretty. We’re not there (yet), but signs like persistent inflation, slower hiring, and big stock market declines have people sounding the alarm.OK, so what things are still within your control? Here are three smart money moves for your finances in 2025.1. Beef up your emergency fundFirst, having a solid emergency fund is really important right now. One of the biggest disasters that could hit you personally is losing your job unexpectedly.How big should your emergency fund be?Retirement expert Robert Brokamp says: “The standard advice is three to six months’ worth of expenses. I tend to favor the latter, especially if you have kids and/or a mortgage. During the 2007-2009 recession, which was the worst economic downturn since the Great Depression, the median length of unemployment for people who lost their jobs rose to 25.2 weeks. So being able to pay your bills for six months without an income is a good goal.”In shaky times, even one extra month of cash can make a huge difference. If you’re light on cash savings right now, start beefing it up.And don’t just leave it in a checking account earning zero interest. Stagflation means you need to beat inflation wherever possible.So keeping all your cash in a high-yield savings account (HYSA) is key. Don’t have an HYSA set up yet? Compare the top-rated savings accounts today, and earn up to 4.40% APY on all your cash2. Pick up a side hustleWhen prices are rising, earning a little extra on the side can make a huge difference. Whether it’s an extra $100 a week from dog sitting, or $1,000 a month from selling stuff online, any extra cash helps avoid dipping into your savings — or worse, racking up debt.Plus, a side hustle doubles as a safety net. If you lose your main gig, you’ve still got a small backup income stream rolling in. And who knows? With the right setup, your side hustle might even grow into a full-time business someday.3. Get rid of any high-interest debt (before it gets worse)Rising expenses are tough. But add in 20% or more interest? That’s a whole different level of pain and stress.If you’re carrying balances month to month, every dollar of debt gets more expensive in a stagflation environment. Your income might stay flat, but your bills sure won’t. That’s why paying down high-interest debt is one of the smartest financial moves you can make right now.Start by attacking your highest-interest balances first. This is called the debt avalanche method. It’s the quickest way to pay off all your debts.And if you need a little breathing room, consider a balance transfer card. If you have good credit, this tool can give you time to pay without extra interest stacking up. Check out the best 0% APR credit cards to pay off debt faster.Beat the chaos before it startsI’m not saying stagflation is guaranteed. I certainly hope our leaders can stop squabbling and work together to improve the economy in 2025.But just like my grandpa always said: “Prepare for the worst, so you’re in the best situation no matter what happens.”Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

In a week full of economic uncertainty — and a little political spice — President Donald Trump called Federal Reserve chair Jerome Powell a “major loser,” pressuring him to cut interest rates ASAP.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

But Powell’s in a tough spot. Cutting rates too soon could fuel more inflation. And keeping them high could slow the economy down further.

Throw rising unemployment into the mix, and it raises a scary question: Are we heading toward stagflation?

What is stagflation?

High inflation + rising unemployment + slowing economy = stagflation.

Basically it’s when prices go up, jobs go away, and the economy moves in slow-mo. It’s an economic worst-case scenario — and it really hurts everyday people like you and me.

The last time the U.S. really dealt with this was back in the 1970s — and it wasn’t pretty. We’re not there (yet), but signs like persistent inflation, slower hiring, and big stock market declines have people sounding the alarm.

OK, so what things are still within your control? Here are three smart money moves for your finances in 2025.

1. Beef up your emergency fund

First, having a solid emergency fund is really important right now. One of the biggest disasters that could hit you personally is losing your job unexpectedly.

How big should your emergency fund be?

Retirement expert Robert Brokamp says: “The standard advice is three to six months’ worth of expenses. I tend to favor the latter, especially if you have kids and/or a mortgage. During the 2007-2009 recession, which was the worst economic downturn since the Great Depression, the median length of unemployment for people who lost their jobs rose to 25.2 weeks. So being able to pay your bills for six months without an income is a good goal.”

In shaky times, even one extra month of cash can make a huge difference. If you’re light on cash savings right now, start beefing it up.

And don’t just leave it in a checking account earning zero interest. Stagflation means you need to beat inflation wherever possible.

2. Pick up a side hustle

When prices are rising, earning a little extra on the side can make a huge difference. Whether it’s an extra $100 a week from dog sitting, or $1,000 a month from selling stuff online, any extra cash helps avoid dipping into your savings — or worse, racking up debt.

Plus, a side hustle doubles as a safety net. If you lose your main gig, you’ve still got a small backup income stream rolling in. And who knows? With the right setup, your side hustle might even grow into a full-time business someday.

3. Get rid of any high-interest debt (before it gets worse)

Rising expenses are tough. But add in 20% or more interest? That’s a whole different level of pain and stress.

If you’re carrying balances month to month, every dollar of debt gets more expensive in a stagflation environment. Your income might stay flat, but your bills sure won’t. That’s why paying down high-interest debt is one of the smartest financial moves you can make right now.

Start by attacking your highest-interest balances first. This is called the debt avalanche method. It’s the quickest way to pay off all your debts.

And if you need a little breathing room, consider a balance transfer card. If you have good credit, this tool can give you time to pay without extra interest stacking up. Check out the best 0% APR credit cards to pay off debt faster.

Beat the chaos before it starts

I’m not saying stagflation is guaranteed. I certainly hope our leaders can stop squabbling and work together to improve the economy in 2025.

But just like my grandpa always said: “Prepare for the worst, so you’re in the best situation no matter what happens.”

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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