The stock market isn’t performing as well as it did only a few months ago. Interest rates are on the rise compounding concerns even further. Analysts worry that a recession looms on the fiscal horizon. Decisionmakers in both the public and private sector fret over how to avoid or address a recession. An article recently published in the Washington Post discussed options for the “right policy” to deal with a potential economic slowdown.
A recession has yet to arrive, which is good. However, the current stock market indicators suggest a recession may prove unavoidable. Without a significant change in the current policy, the downward trend should continue. Even if the market stabilizes, investors won’t find the situation positive. Stabilization at current levels won’t restore lost gains.
Focusing on losses in the U.S. stock market and the nation’s overall economic situation makes sense. Focusing solely on the U.S., however, isn’t wise. China plays a significant role in the overall global economy. Economic indicators from China do not look good so far. If things worsen, a ripple effect may travel through the financial markets.
Europe seems to suffer from economic growth troubles as well. Political instability related to unrest in France and the Brexit in the U.K. further confound matters.
Incredibly, things in the United States look good on many levels. Job numbers and inflation stats appear favorable. Without the drop in the stock market, the domestic economy would be stable. The stock market did drop, which means the undesirable effects require addressing. What particular policy can do this and its implementation steps remain to be seen.
The Post suggests experts focus too much on “yesterday’s problems.” A lack of foresight emphasizing the current global landscape can create a narrow approach to fixing things. Without a proper fix, corrections and improvements in the economy won’t likely occur.