FOX 5 NY - It was all smiles for some on Wall Street, but the stock market opened up its week with more losses.
The Dow Jones has fallen 16%, and the NASDAQ is down roughly 30%. The S&P 500 is down more than 20% from its January 3 peak, and closing in on bear market territory for the first time since the onset of the COVID-19 pandemic.
Economic advisor Larry Summers believes we could be on the brink of a recession.
"Given where we've gotten to, it's more likely than not that we'll have a recession within the next two years," said Summers.
The U.S. Federal Reserve is expected to raise interest rates again this week— by 0.75%— to try and get the crisis under control.
It’s something the federal government hasn’t done since 1994, and a sure sign the situation has gone from bad to worse.
The hope is that higher interest rates will lead inflation to, you know, cool down. That is essentially what the Fed is trying to achieve right now," says Oren Klachkin, Lead Economist at Oxford Economics USA.
The inflation rate accelerated to 8.6% in May, compared to 8.3% the month prior.
As stocks drop, food costs, rents, and gas prices continue to soar.
The national gas average now tops $5.00 per gallon.