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Whiplash on Wall Street leaves investors wondering what's next for US economy

The idea of a recession has left investors with a nervous eye on the numbers.

CLEVELAND — Stocks have been on a rollercoaster this week, ever since the Federal Reserve announced it would raise interest rates a half a percent.

“They're trying to get ahead of inflation, but there's always concern that when the Fed raises rates, is that going to push us into the next recession?” said Elizabeth Scheiderer, a senior financial advisor with Sequoia Financial Group in Mayfield Heights.

The idea of a recession has left investors with a nervous eye on the numbers. The DOW dropped 345 points Friday, down for a sixth straight week, one day after it’s single worst day since 2020.

The S&P 500 shed 1.2 percent, while the Nasdaq Composite fell 1.7 percent.

“Market volatility though we don't see it every day is a normal occurrence,” said NBC News Senior Business Analyst Stephanie Ruhle.

Scheiderer says the market is digesting a lot of information – interest rates, inflation, uncertainty over Ukraine and oil prices, the supply chain and China’s coronavirus lockdowns and the midterms.

“Are we due for a recession? That's a great question. But we are due for, is this volatility,” she said. “The average market correction in a midterm election year is 17 percent and it happens every four years. And we just tend to forget.”

Currently the market is down about 15 percent on the year. The best thing for you to do is likely hold tight.

“Typically doing nothing is the best trade you can make. In an environment like this. There is no question that the next several months are going to be very, very bumpy,” said CNBC’s Andrew Ross Sorkin.

“It's time in the market, not timing the market that really builds wealth over time,” said Scheiderer, “Staying invested is really the best way to, to really manage through this volatility. Especially if you don't need your money for the next two, three years.”

Paying down debt is also a good idea as borrowing gets more expensive. The hope is gas and groceries do not continue to get more expensive, as inflation starts to cool.

“Hopefully by the end of the year, we'll start to see inflation come back down and then especially a year from now, maybe back to that 4 percent rate,” said Scheiderer.

Those close to retirement or needing to get into their investments now, may want to look to the bond market, and consult their advisor. For the rest of us, it may be best not to look.

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