: Powell has picked sides, but which is worse for you: inflation or recession?

by | Sep 22, 2022 | Stock Market

When Federal Reserve Chairman Jerome Powell said Wednesday that “no one knows whether this process will lead to a recession or, if so, how significant that recession would be,” he was clearly picking sides. In the hard place between two bad situations, the Federal Reserve is indicating that curbing high inflation is the goal, even if that might lead the U.S. into a recession.  But what about you? What’s better for the whole country might not match your personal economic situation.

“The argument is usually that since inflation impacts everyone and a recession impacts those who lose jobs the most, that inflation is worse,” says Jamie Hopkins, managing partner of wealth solutions at Carson Group. But that said, he’d rather have to deal with the high inflation of the 1970s than the worst economic lows of U.S. history, like in Great Depression or the Great Recession. So maybe the answer isn’t so clear-cut for individuals.  Inflation is personal, but so is recession How people experience inflation varies by location, age and economic status. If you own a home and a car that you don’t drive much, you may be affected less directly than a renter who has a high gas bill commuting to a job with low wage growth. If you’re a retiree on a fixed income, the increase in your grocery bill may bite more than for somebody who is working steadily. …

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