Jill On Money: The 'recession' label is not as important as YOU
Economists believe that prices have probably peaked, but the pressures that have built up will remain in the system, which means the Fed is likely to keep hiking rates at the three remaining policy meetings of 2022.
The size and timing of increases will be data dependent, though most economists believe that the benchmark lending rate will rise by another full percentage point to 3.5% by the end of the year. To put that in perspective, short-term rates were ZERO until March of this year and in November 1981, when inflation was last this high, the Fed Funds rate stood at 13.3%.
Where does this leave us on whether we are currently in a recession?
The answer may not be that important to most Americans. For workers, either you have a job that pays you enough to absorb the current high prices or you do not – and if not, you may need to find another job or part-time work to supplement your household income.
If you are already in retirement, you either have saved enough (or have sufficient income streams) to pay for the higher costs, or you are heading back into the labor force to do so. In other words, the label “recession” matters less than your current personal situation.
(Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at email@example.com. Check her website at www.jillonmoney.com)
©2022 Tribune Content Agency, LLC