Israel-Hamas Conflict Stokes Fears of 1970s-Style Stagflation

Hamas’s attack on Israel has sparked fears of a repeat of 1970s stagflation - oil price shocks then caused high inflation and low growth. Current Israel conflict risks more oil price spikes.

Inflation averaged 11.3% globally in the 1970s, over 3 times higher than prior decade. Today's inflation still high despite some moderation.

Striking workers pushed high wage gains in the 1970s, exacerbating inflation. Worker strikes now at highest since then, though smaller scale.

Forecasts were too optimistic on inflation in the 1970s. Risk of similar complacency today with inflation still above targets.

Reasons for optimism include aggressive rate hikes by central banks and supply chain improvements. But fresh shocks could unanchor inflation expectations.