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You’ve seen talk of an impending recession for months, but there’s still no clear answer of how today’s unique economic climate will pan out.READ THE ARTICLE
Currently, two primary scenarios exist:
📌 1) A strong labor market and slowing inflation means we’re heading for a soft landing: Inflation has cooled since its July 2022 peak of 8.9 percent, consumer spending is strong and unemployment has remained at its lowest point in over half a century at 3.4 percent. With this data in mind, some economists believe the “traditional” idea of a recession isn’t a given.
📌 2) Inflation isn’t under control and the labor market is too tight, so we’re probably heading for a hard landing: Inflation may not be declining quickly enough. Further, the labor market could be too strong for the Fed’s liking, causing pressure to continue raising wages and prices. This could push more aggressive interest rate hikes and lead to more market volatility.
A mix of both: While these two scenarios are possible, so is an outcome of something in the middle. Many things would need to consistently go right in the economy to pull off a soft landing, which is a potential reality. However, if we do see a recession in the months or years ahead, odds are in our favor it will be mild and not prolonged, like the Great Recession.
If your retirement plan was created utilizing our Retire With Purpose framework, know we’ve factored in the unexpected. Regardless of what happens next, you have a comprehensive strategy and a team of professionals on your side.