After more than a decade of rising prices, stock values turned down in 2020 as rising inflation pushed the Federal Reserve to tighten its monetary policy, push up interest rates and end the bull market run.
The bear market that hit U.S. stocks in 2022 pushed the broadest measure of the stock market, the S&P 500, down by 19.4% in the worst year for stocks since the downturn in 2008. Bond prices also declined last year. While nominal wages grew and jobs remained plentiful, inflation outpaced wage gains for most workers.
As a result, most investors and wage earners lost ground last year. Higher inflation brought on by supply chain problems created by the pandemic, the shift in monetary policy by the Federal Reserve and the economic fallout from Russia's invasion of Ukraine all combined to weaken the economy and devalue equities and bonds.
A volatile market for stocks and jobs is likely to persist in 2023, at least for the first part of the year, experts predict. But the slowdown, especially in growing cities like Chattanooga, is not projected to be as long or severe as the 2008-2009 recession. Inflation has already shown some signs of easing and the economy continues to add jobs, albeit at a much slower pace than before the pandemic.
In Chattanooga, the jobless rate has remained below the U.S. average for most of the past decade and home prices remain nearly 30% below the U.S. average, even though housing prices in Chattanooga have risen faster than workers' pay for most of the past decade.
How should you invest your money in such a volatile time? What can wage earners do to keep pace with higher inflation on most of the goods and services they buy? What's the outlook for interest rates on home, car or business loans? We asked experts from a variety of perspectives, as well as ordinary workers, investors and home buyers, to see what they think about the future and what they are doing with their money.