A Wall Street plate is seen on a street vendor stall outside the NYSE in New York City. Stocks around the world, including in the U.S., remain near record highs and bond markets are calm, suggesting little panic for now.

The spectre of U.S. stagflation is stalking global markets, causing some investors to position portfolios to dodge the potential damage that tariffs could wreak on growth and inflation in the world’s dominant economy.

Some 70% of global investors surveyed by BofA Global Research in early August said they expect stagflation - the combination of below trend growth and above trend inflation - in the next 12 months.

Recent data showing U.S. labour market weakness, a sharp rise in U.S. core inflation and an unexpected surge in producer prices justifies this concern.

But

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