Are We in a Recession? If So, Having Cash Helps
Ongoing stock market volatility and record inflation are fueling predictions of a recession. If the predictions are correct, both businesses and individuals will be looking to protect their liquidity and financial security. And one way to accomplish that is by having cash on hand.
In the context of a recession, “cash” typically refers to physical currency as well as liquidity in the form of savings and money-market accounts at your bank. These types of accounts help you avoid the stock market’s inevitable ebb and flow, and ride out an economic downturn.
So, are we in a recession? As of this writing, it is unclear if a recession is under way. An official recession requires two consecutive quarters of declining gross domestic product (GDP). In the first quarter of 2022, the economy shrank 1.6%. Other recession indicators typically include a bear market on Wall Street and rising unemployment.