As soon as US Federal Reserve Chief Jerome Powell stated in his announcement that it could take quite some time to stabilize the American economy and price volatility, and people may have to endure economic pain, the market seemed to be in an uproar. This announcement has not only worried investors but has also rattled a broader section of society. And it’s not just the US; this announcement is sending shockwaves to investors and the common people worldwide.
Let’s see how this announcement is creating an atmosphere of fear overall (for real) and how now even the middle class is in danger.
US Fed War, What will Middle Class do this time?
After Jerome Powell’s statement, on Friday, the Dow dropped by 1,000 points, Nasdaq fell by 3%, and all precious metals also experienced a decline. Seeing this state of the US markets, the overall sentiment of all markets remained negative, and worldwide markets continued to decline. With cryptocurrencies already falling, they took another hit on Friday, dropping by 6%, and by 4% on Saturday afternoon.
Observing this, the market in India also opened negatively on Monday. Many investors, who had earned some profit, also decided to exit, fearing what might happen next. When it comes to stocks, equities, and the market in general, there are a lot of bearish sentiments related to hawkish comments and announcements.
Moreover, many analysts have also stated that stocks and equities could decline further from here. Bubba Trading’s chief analyst even suggested that the equity market could potentially drop by 50-60%.
And if that happens, then directly and indirectly, the middle class will be trapped from every angle.
Well, because when the markets are down, it means the economy is down, and when the economy is down, companies stop hiring, and worse, they start laying off current staff, leading to a rise in unemployment. And once the scenario of ‘unemployment’ emerges, people’s spending capacity automatically decreases – because people only spend money on essentials.
Besides, when the market is down, it means repo rates are high, loans are expensive, EMIs are expensive!!! Moreover, if global markets remain affected, exported items become more expensive, and so does crude oil… so fuel prices rise… and when fuel prices rise, the prices of basic essentials like vegetables also increase.
And if the market continues to decline like this, then it’s a recession!
So should we be scared too? Will the common man suffer again?
Well, well, well, you saw that the market was quite down on Monday, but immediately the next day, i.e., today… the market gained a good amount. Now, that’s a good sign!
Interestingly, not just today, but since the market began, such predictions have come up, and yet the market has bounced back well every time.
Regarding the US economy, you’ll remember during the 2008 recession, the US and many European countries’ economies were hit hard. India was affected too, but not as much. And even if there is a slowdown in the economy this time, it may not necessarily have the same effect on the Indian markets. And even if it does, the Indian market will bounce back just like before.
That’s why it’s often said that no matter how much the market is down, you’re not in loss until you sell your shares. And if you need an experienced guide on how to invest smartly and safely in such markets, then today,
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