Stocks slipped again Thursday as investors braced for more interest rate hikes from the Federal Reserve, and the volatility is once again stirring up debates over whether the U.S. economy is headed for a recession.
"Our view right now is that for the next six months the U.S. economy should be okay," said Ahmed Riesgo, chief investment officer for financial services company Insigneo.
He said the strength of the January jobs report has put downward pressure on stocks because it showed resilience in the economy that many investors interpreted as a sign that more rate hikes were coming. Recent reports showing "sticky" inflation have had a similar effect.
These trends increase the odds of a recession, he added, because the uncertainty around inflation makes it more likely the Fed will make a policy mistake.
"Our base case is not a recession," he said. "But when you look a little bit further out over a 12 month period, I think the chances of a mild recession in the United States are very elevated."
He also cited recent comments from Fed officials as evidence for this theory. The nation's top bankers have signaled they are committed to bringing inflation down to 2 percent annually, while also saying hitting that goal effectively requires inducing a recession.
The state of Arkansas sued TikTok and Facebook parent Meta on Tuesday, claiming the social media companies were misleading consumers about the safety of children on their platforms and protections of users' private data.
Stocks are rising again as a bit more fear evaporates from Wall Street. The S&P 500 was up 0.7% early Thursday. The benchmark index is on pace for its fifth gain in the last six days.
The Federal Deposit Insurance Corp. is set to pay almost $23 billion to stabilize the banking sector. That money comes from an insurance fund that is refilled through fees paid by banks. Now the agency is considering a special assessment on the entire industry to help make up the costs, according to a Bloomberg report.
About 61% of Americans say the economy is impacting their mental health, according to a PayPal survey. Shanthi Sarkar, vice president of financial services at PayPal, joined Cheddar News to break down some key takeaways from the survey and offer tips on saving and managing money.
Monthly VC funding fell below $20 billion in February, marking a two-year low. Jager McConnell, CEO of Crunchbase, joined Cheddar News to discuss the current funding climate and what lies ahead.
