LANCASTER, Pa. — After last week's troubling drop at the stock market many are wondering if we are headed towards a recession.
"A recession is the kind of thing that you can't really do much about as an individual," said Yeva Nersisyan, Assistant Professor of Economics at Franklin & Marshall College.
On Wednesday, the Dow Jones Average sank more than 1,100 points and S&P 500 had its biggest drop in nearly two years.
Nersisyan says the volatility of the stock market has some people on edge.
"The Federal Reserve has started tightening the economy, they're raising interest rates which is going to potentially affect consumption especially consumption of durable goods things that you have to finance," she explained.
Given that the wealthiest 10% of Americans own 80% of all stocks, she says stock market drops aren't going to impact your average Joe.
"It's not going to affect the average American directly unless your close to retirement and you have 401k," she said.
Nersisyan says inflation and the fear of a recession are the biggest reasons why the stock market is dropping.
If we are headed to a recession, she says it'll take a multi-tiered approach to ratify it, "This is not the kind of problem that has individual solutions rather it's the kind of problem that needs policy solutions."
Policy solutions like what we've seen during the COVID-19 lockdown such as unemployment benefits and stimulus checks.
While there's no definitive answer on if we're headed to a recession or not, Nersisyan says it's best to save your money if you can.