How a US Recession , Could Be Great News , for Investors.<br />Business Insider reports that the United States' <br />economy is shrinking amid fears of a recession, <br />yet the stock market seems to be thriving.<br />In July, the S&P rose by 9.1%, scoring its <br />best monthly gain since the post-lockdown <br />rebound in November of 2020.<br />Other indexes saw similar gains, signaling that market pessimism could be turning around.<br />Last week, data showed <br />that the economy had shrunk <br />for its second consecutive quarter.<br />Inflation remains at a four-decade high, while <br />Americans' financial cushions are rapidly dwindling<br />and confidence in the economy has hit near record lows. .<br />In the event of a recession, the Federal Reserve would have to consider lowering interest rates, which would be a big boon for investors.<br />In the event of a recession, the Federal Reserve would have to consider lowering interest rates, which would be a big boon for investors.<br />Lower interest rates would <br />boost valuations, as it would <br />allow companies to borrow more.<br />Investors are now betting on economic growth <br />to slow so much that the Fed will be forced <br />to rollback interest rate hikes announced in 2022.<br />Investors are now betting on economic growth <br />to slow so much that the Fed will be forced <br />to rollback interest rate hikes announced in 2022.<br />However, Business Insider reports that officials <br />at the Fed have signaled that interest rate hikes <br />are expected to continue through 2023.<br />You've got to take any estimates of what rates will be next year with a grain of salt. There's significantly more uncertainty now about the path ahead than I think there ordinarily is, and ordinarily it's quite high, Jerome Powell, Federal Reserve Chair, via Business Insider.<br />You've got to take any estimates of what rates will be next year with a grain of salt. There's significantly more uncertainty now about the path ahead than I think there ordinarily is, and ordinarily it's quite high, Jerome Powell, Federal Reserve Chair, via Business Insider
