There seems to be a debate on the definition of a recession. Technically, a recession is defined as two successive quarters of negative growth. By this definition, we are in a recession. The White House is telling us that this is not the definition of a recession. It doesn't matter what a recession means, the US economy is not looking good if you ignore the Labor market. Consumer Confidence is very low, with an inflation rate of 9.1%.
Inflation is the main headwind on the US economy right now, and the Federal Reserve System is forced to raise interest rates. And higher interest rates are not good for stocks $SPX500 .
We are yet to see earnings compression, and it will happen if this stagflation continues. Should we sell everything? No. It is better to stay invested but it is also important to remember to buy good companies at discount prices.
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