Weekend Reading: 6 Questions About the Market & the Economy
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Today’s economic climate continues to move quickly and feel confusing for investors. While we have no crystal ball to tell us what the remainder of 2022 will bring, here, you’ll find blogger Ben Carlson’s best data-based guesses of what might be around the corner. Some of his most noteworthy answers to questions you may have include:
READ THE ARTICLE📌 What is your reaction to the latest CPI report and your outlook on inflation? We received some good news on the inflation front, as reports show soaring prices went flat from June to July. Additionally, gas prices and oil prices have remained down, possibly meaning this trend could continue.
📌 What does a soft landing look like? According to Carlson, “Anything five percent and under for the unemployment rate would be a win if we could get inflation back to three percent or so.” Whether or not that is possible depends on the job market, which still remains in a weird place. A large number of job openings remain open for some companies, while others are simultaneously having to lay off.
📌 What can we learn from this downturn? Since 2020, we’ve experienced events in the markets and economy all at the same time that have never happened before. The main takeaway here is that “Everything in the markets is cyclical.”
📌 Have we hit a bottom in the markets? If inflation continues to cool without any major events impacting the markets, relief could come by 2023 or sooner. On the other hand, further volatility is also possible with the Fed still having work to do, meaning a risk of policy error is still high.
Bottom line: The past doesn’t predict the future, but it does rhyme. That should deliver at least a semblance of peace.