True or false – is the United States in a recession? Depending on where you get your news you may get 10 different answers.

The word Recession has been floated around dating back to 2022, with constant talks that the US economy is not in recession but can be on the horizon. The definition of a recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. However, the last two quarters have both shown positive growth rates: 3.4% in Q4 2023 and 1.6% in Q1 2024. Therefore, according to most economists, the answer to our original question is no.

Initially during the 2nd half of 2023 – there was optimism that interest rates would begin to decrease. According to the Federal Reserve, interest rates are planned to stay near current levels as they evaluate if inflation levels are being “tamed” with concrete proof of inflation decreasing. The target inflation rate for the Federal Reserve is 2% over time; however, the US is not quiet there yet. Don’t be surprised to see rates increase within the next couple of months.

The good news is that your Treasuries, CD’s, and Money Markets are continuing to work for you with money markets in brokerage accounts averaging a 5% yield risk free. Additionally, a 6 month and 1-year Treasury can get you 5.28% & 5.18% respectively. Short term rates are still favored over long term rates as there is still an inverted yield curve. Crafting your investment portfolio around your spending plan is crucial for driving efficiency and success.

On the contrary, with higher rates, new mortgages as well as car loans are at their highest levels in about two decades. Despite this, individuals remain positive, anticipating the opportunity to refinance when rates decrease in the future.

With a little more than a quarter of 2024 behind us, let’s look at current year-to-date returns: the SP500 is up 6.43%, NASDAQ up 5.43%, and DJIA up 0.96%. However, in regard to the economy, the market is not always a direct indicator of it’s current standings.

With a turbulent presidential election approaching later this year, the expectation is continued volatility in both the markets and legislative outlooks. It is human nature to sometimes lean towards expecting the worst, but we can take a deep breathe by focusing on the things we can control. Crafting your portfolio around your spending plan can serve to alleviate concerns when there are large bumps in the market.

Always important to create a plan and stick with that plan, this pays major “dividends” for your long term success!