Question of the year: Are we currently in a recession? Numerous indicators, such as the inverted yield curve, news of job losses, escalating consumer credit, dwindling savings, and inflation, suggest the possibility. However, it’s important to note that the occurrence of a recession is not predetermined.
Determining whether the United States is experiencing a recession falls under the purview of the National Bureau of Economic Research (NBER). Typically, a recession is associated with two consecutive quarters of negative Gross Domestic Product (GDP) growth. It signifies a widespread decline in economic activity across the nation. As of now, the available data, which is lagging and retrospective, does not indicate a recession.
Eminent Moodyโs Economist Mark Zandi, one of the foremost experts in the field, predicts that the United States is leaning towards evading a recession. Zandi presents his viewpoints in an article titled “5 reasons why top economist Mark Zandi says, ‘this time is different’ and he’s ‘betting against’ a U.S. recession,” which can be found on Fortune.com. He highlights five reasons supporting his belief that the U.S. could steer clear of a recession: excess savings, labor hoarding, manageable debt burdens, anchored inflation expectations, and favorable oil prices. To gain further knowledge as a fiscal investor, it is recommended to peruse the article. While the economy is expected to decelerate, a recession is not an assured outcome.
ย What should a fiscal investor do? Is the economy on the brink of a crash? Should one consider buying a cabin and adopting a cautious stance? The answer is no. Regardless of the future state of the economy, it is advisable to adhere to a SMART financial plan. Maintain financial well-being and continue investing in high-quality assets. This is not the time to aim for extravagant gains but rather to focus on steady progress. Remember, the key is to remain in the game and avoid making impulsive decisions based solely on the possibility of a recession. This is not the time to be swinging for a home run when a single will when the game.ย Just donโt get out!
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