A new report from the National Association of Business Economics predicts higher inflation and slower growth through the middle of next year, reports USA Today. The old word for that used to be “stagflation.”

For the last three decades we’ve assumed that problem had been resolved by ditching Keynesian thinking and sticking with the magic fiscal policies of Fed Chairmen Volcker and Greenspan. Of course, we’re not back to the 1970s but a lot of the trouble back then started with higher oil prices.

The good news today is that the oil price is falling but the bad news is that the price of oil created the largest trade deficit in history. In July, it was $68 billion, reports MarketWatch.

The NABE survey predicts a core inflation rate near 3 percent, which is way above what the Fed will tolerate. The falling oil prices may help some but the other bad news in the deficit is that American exports fell in July for the first time since February.

The Fed will have to do one good balancing act next time round when it weighs what one economist calls “a lot of uncertainty” against the specter of inflation.