If a Recession Is Coming, History Is Clear About What Long-Term Investors Can Expect
Past recessions offer an important lesson for long-term investors.
Overview
There are legitimate reasons to worry about a recession right now. But there's a big difference between recognizing those risks and dumping your stocks because you think one is right around the corner.
The U.S. economy is showing signs of slowing. Employers unexpectedly cut 23,000 jobs in July, and hiring has been considerably weaker in 2026 than during the expansion that followed the loosening of pandemic restrictions. Consumer spending has shown some weakness, too, with retail sales falling 0.6% in July and the measure used to estimate quarterly consumer spending declining 0.4%.
Details
Then there's inflation. The Federal Reserve is still holding its benchmark interest rate at 3.5% to 3.75%, while economists surveyed by Reuters expect inflation to average about 3.5% this year and remain above the Fed's 2% target through at least 2028. Higher energy prices, tariffs, and other inflationary pressures could make it harder for the Fed to cut rates aggressively if the economy weakens. That's not exactly an ideal combination.
Source
Originally published at www.fool.com.