US Economy Weighs on Stocks as Fed Faces Stagflation Challenge

Asian shares were mixed on Monday after a weaker-than-expected report on the US economy sent U.S. stocks back from their all-time high.

The Dow Jones Industrial Average slipped 0.2% and the S&P 500 fell 0.2% following the data, which showed shoppers spent less at US retailers last month.

This could help the Federal Reserve keep interest rates low, but also suggests growth may be slowing down when inflation is still high.

The Fed has been dealing with the challenge of balancing a stagnating economy and high inflation, known as 'stagflation', which is considered a worst-case scenario.