Are We Headed for the Next Recession?
Before we can determine if we are headed towards a recession, we first need to define what a recession is. A recession is “a period in the business cycle when economic activities are in a general decline, typically accompanied by elevated unemployment, falling income and consumer spending, rising business failures, and falling stock markets,” states Evie Liu, a writer at barrons.com.
What Are Experts Saying?
“Recently, the yield curve uninverted. Many are wondering what this means in terms of a recession. But to really evaluate whether the next recession is on the horizon, it may help to look at other indicators in addition to the yield curve—namely, job growth, consumer confidence, and business confidence,” says Brad McMillan, a contributor for Forbes. Is it possible? Of course. Do we have the power to stop a recession? Yes. The best way to keep the economy from going into a recession is to keep spending. Our economy needs an injection of cash into it. Supporting your local businesses is a great way to start. This is why the Federal Reserve dropped interest rates to between 0% and .25%, simply to give investors incentive to invest back into our economy.
How Should I View the Stock Market?
I spoke with an investor over the weekend, and he talked about how the Stock Market is much like our feelings. For instance, Friday, March 13th, when the federal government announced drastic measures to protect our country and citizens from COVID-19, the market posted massive gains from Thursday’s ultimate plummet. On Thursday, March 12th, the DOW posted one of the worst days in history, with an astonishing 2,300 tank. You cannot use the stock market as the sole measure of a recession. However, it can be an indicator as to how investors are feeling about current world issues. Consult your financial adviser before making any life-impacting financial decisions, and make sure you understand exactly what is happening and what could happen in the market in the future.