By Kristin Myers, Editor-in-Chief

ICYMI: Experts Aren't Sure How Bad The Next Recession Will Be

In case you missed it, experts are divided on how bad the next recession will be or if the U.S. economy will even go into a recession in the first place. Currently, the Federal Reserve is walking a tightrope between slowing the economy to tame inflation and avoiding a recession.

Experts at Goldman Sachs and Bank of America (some of the biggest banks in the U.S.) believe there's a 30% and 40% chance, respectively, that a recession will happen next year.

But even if the U.S. economy does slip into a recession, there is no way to know how long—or how bad—it will be. Economists at Wells Fargo say a mild recession is likely—more like the one we had in the early 1990s and much less like some of the severe ones we've had when you look at the 12 recessions since World War II.

On the opposite end of the spectrum, Nouriel Roubini, chief economist at Atlas Capital, predicts "cascading financial turmoil" in the future.

Meanwhile, some policymakers at the Fed believe that we can avoid a recession despite interest rate hikes to fight inflation. However, Federal Reserve Chair Jerome Powell said that raising interest rates without slowing down the economy into a recession has become more challenging due to the Russian invasion of Ukraine, which has driven up the price of energy commodities like oil, food, and other important resources.

If your fears of a recession have grown, it's understandable—if it does happen, it could be bad news for all of us, as recessions often mean layoffs and increased unemployment levels.

-Kristin

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Term of the Day

Recession

There's been a lot of talk of an imminent U.S. recession, and you might be left wondering what it actually means. Is it an economic downturn? Is it something more? Simply put, a recession is a significant decline in economic activity, lasting more than a few months. Economic experts typically say there's a recession when that sustained drop is seen in five areas: real gross domestic product, income, employment, manufacturing, and retail sales.

Think of it like this. You wake up with a stuffy nose and a slight cough. You're pretty sure that you're just a little worn out from a long week of work. But, as the day goes on, you notice your energy drops, your hunger dissipates, your cough gets worse and you're constantly sneezing. This goes on for three days. Your body's indicators say this is a sustained sickness, not just a temporary tiredness. And because of that, you take more urgent measures to remedy your condition.

That's kind of how recessions work. When a downturn turns into a recession, the Federal Reserve takes more urgent measures (like making it less expensive to borrow money by lowering interest rates) to temper the faltering economy.

Off the Charts

States across the U.S. have added sexual orientation and/or gender identity as protected classes in their housing discrimination laws over the years. These laws can protect LGBTQ+ individuals from unfair evictions, being denied housing, and being refused the chance to rent or buy a home based on their sexual orientation or gender identity. However, less than half of the states have laws that explicitly ban discrimination on the basis of sexual orientation and gender identity—10 states have partial laws, while 18 states have none.