Wall Street Meltdown: Is a Recession Next?
Financial prognosticators have been predicting an end to the record bull market for years. The current recovery is the longest bull market in recent history. Could we today's massive drop be an indicator that a bear market has finally returned? Are we on the verge of a recession?The Dow Dropped 800 Points as financial markets and investors around the world wondered if this is a potential recession precursor. Wall Street spent Wednesday in a financial free-fall as the Dow Jones Industrial Average plummeted 800 points before all was said and done.
The day also saw the S&P slip 2.93 percent and the Nasdaq fall more than 3 percent. Marking Wall Street's worst day this year, the massive stock drop is being blamed on an inverted yield curve in government bonds. According to experts, that occurs when the yield on a 10-year Treasury note falls below the two-year rate.
President Trump blamed the Fed for the turbulent market, reports CNBC. The president has been involved in an economic game of brinkmanship with China concerning trade. He announced that his tariffs on the Chinese would not happen before Christmas.
Back to the experts, who say, it's a phenomenon that happens just before a recession. "It’s a dangerous and upsetting harbinger of the future of the economy," says economist Dan North. "Typically, when the yield curve inverts for even a short period of time, we enter a recession about a year later." Are you taking steps to prepare for a possible recession? Do you think fear of a recession might actually cause a recession?