The Fed's staff put a decidedly stagflationary forecast together at the May meeting, and that's important because it could become the foundation for what officials (to the extent they agree with it) submit in their SEPs next month. It's described rather clinically, as usual, but the Fed staff wrote down a material slowdown in the labor market that raises the unemployment rate this year and keeps the unemployment rate elevated through the forecast horizon (through 2027) The Fed staff also projects inflation rising "markedly" this year, with prices having a "smaller boost" in 2026. Notably, the staff says if their wrong about the forecast in 2026 and 2027 (when inflation is projected to hit 2%), it's because they're more likely to under-estimate inflation. Caveats: The forecast was prepared for early May, before the trade détente with China.