‘Not in a recession’: Experts respond to inflation fears
(NewsNation) — Inflation has caused the price of some everyday items to skyrocket over the last few months and there are concerns about a recession.
Hedge fund manager Cory Johnson explained there are a variety of reasons we’re experiencing inflation.
“The Feds have chosen to slow down the economy, even though that hurts the poorest, in hopes that that will cool inflation. They can’t fix climate change. They can’t kick Russia out of Ukraine … But what they can do right now is slow down the economy and stop fueling inflation.”
NewsNation’s Ashleigh Banfield chatted with financial experts about the 2008 recession and what’s happening now.
“In 2008, you knew right away that we were in a recession. Today, it’s like a slow death,” America’s “Money Smart Guy” Matt Sapaula said.
It’s also important to remember, “we’re not in a recession yet, and we may not be at all,” Johnson said. “Even the recessions we’ve had, the last few, have been a lot shorter than they have typically.”
Kathryn Tuggle, chief content officer of HerMoney.com, shared lessons learned from past recessions to help cope with current conditions: “Every era is different. But some of those tried and true philosophies are never going to change,” Tuggle said.
- Negotiate for a lower rate
- Pay off all debts
- Take on a side hustle
- Defer purchases that aren’t necessary
“Those are things that got us through the downturn in the ’80s, in 2008. And they’re going to serve us well now,” Tuggle added.
On the bright side, millions of Americans could take home more pay in 2023, thanks to inflation adjustments to the tax code announced by the IRS on Tuesday.
Among the dozens of changes prompted by the soaring costs of food, rent, gasoline and other items, the IRS is hiking the standard deduction for tax year 2023 by roughly 7 percent.
For couples who file jointly for tax year 2023, the standard deduction increases to $27,700, up $1,800 from tax year 2022, the IRS announced. Single taxpayers and married people filing separately will see their standard deduction rise to $13,850, up $900, and for heads of households, the standard deduction will be $20,800, up $1,400.
There’s also a silver lining in a new report on housing. Real estate company Redfin says home sales and new listings both plunged by more 20% last month, the most since the start of the pandemic lockdown.
That’s mostly due to a steep rise in mortgage rates, but some prices kept on rising last month, by 8% year-over-year.
The Associated Press contributed to this report.