So, what’s happening in the news? More of the same, really. The Fed is still trying to do damage control on the economy. Younger generations are still struggling to stay afloat with limited resources. Economies are cautiously re-opening. Check out our roundup below for the latest.
Chairman of Federal Reserve Predicts Long-Term Recession
AP News reports that Fed Chairman Jerome Powell is concerned about a possible long-term recession as a result of the current crisis. While some others feel optimistic that the downturn will be short-lived, “He repeated his previous warnings that the Fed can lend money to solvent companies to help carry them through the crisis but that a longer downturn would likely bankrupt some previously healthy companies without more help from the government.” Some lawmakers are ready to offer even more aid, but others want to wait to see what results will come from the trillions in aid already given.
President Trump would like to see interest rates move into negative territory, but Powell isn’t planning on it. Negative interest rates would essentially charge the banks interest for any money that they aren’t loaning out. Some European countries, as well as Japan, have tried this tactic in the past few years, but the outcome hasn’t been great.
Good News for Real Estate
Real estate buyers, sellers, renters and movers have been put on hold all over the globe as countries try to minimize the spread of the coronavirus. Britain is cautiously re-opening its real estate market. Its guidelines, laid out in this article from Forbes, are pertinent no matter where you live–recommended reading if you’re shopping for a new home or rental property or planning to sell in the near future.
Millennials Doing What It Takes
With plans on hold and echoes of 2008, millennials turn to the security of savings, reports CNBC. They may have lost a full-time job or one of several part-time jobs, or had a decrease in income from their own businesses because of the pandemic. But these millennials are drawing from their savings as well as their experiences during the last recession to get through this one.
Recession Worst for Youngest Employees
“As a disease, coronavirus disproportionately preys on the elderly. But Generation Z, at least in the short term, is set to bear the brunt of the ensuing financial chaos,” according to this article. Because unemployment has disproportionately affected such industries as hospitality, childcare and entertainment, entry-level jobs have taken the hardest hit. That’s bad news for Gen Z, who are just beginning their careers. Millennials, although they may have lost fewer total jobs that Gen Z, were more affected by the 2008 recession. They’re likely to suffer more over the long term, simply because they have fewer years to recover before they reach retirement age.
Thanks for reading, and stay well!