Recession Fears Grow Despite Strong Economy

Despite strong job growth under the Biden administration, recent economic data has sparked recession fears. Although the economy is not currently in a recession by the formal definition, an increase in the unemployment rate has triggered the “Sahm Rule,” a historically accurate recession predictor. While some economists, including the rule`s creator, believe this time is different, investors are reacting with concern, driving down stock prices. The Federal Reserve`s plan to curb inflation by raising interest rates without causing a recession is now in question, with some analysts suggesting the economy may be weakening too quickly. The possibility of the Fed having to aggressively cut rates to avoid a recession is now a major concern.