STEVENS POINT, Wi. (WAOW)– Many people are worried about the U.S economy and the possibility of a recession following the news this week of a bear market.
The S&P 500 went into a bear market on Monday for the first time since the start of the pandemic.
“Hop in the car, go to the grocery store, then stop and get gas, and then go home and turn the news on,” Certified Financial Planner Jason Glisczynski said. “Those three things alone, I think would paint a pretty good picture about what is going on socially, economically and politically.”
The phrase bear market means there has been a 20 percent decrease from the stock market’s highest peak. CBS News reported the index went down four percent on Monday, totaling a 21 percent below its highest point in January.
Glisczynski pointed out numerous reasons the market fell so low.
“Elevated prices, inflation, increased cost of fuel and those are things that contribute to that decrease in overall market value,” Glisczynski said.
A bear market can happen both in and out of times of recession. It does not trigger or necessarily lead to a recession either, but the worry and fear of a bear market can send consumers into a tailspin. Glisczynski said right now is the best time to take control of personal finances.
“There is obviously cause for concern, ” Glisczynski said. “However, people can address that concern by having a rock-solid financial plan.”
Former Treasury Secretary Lawrence Summers predicts the country is likely to see a recession in the next two years.
“…I think we have overheated the economy and had some bad luck and when the pendulum swings too far one way it tends to swing back the other way,” Summers said.
President Biden disagrees and has been strong in his opinion that the Federal Reserve is able to handle the current financial climate. The President has said he is using all means possible to lower prices for Americans and stresses a recession is “not inevitable.”