HARRISBURG, Pa. — The S&P 500 entered a bear market for the first time in two years.
Many analysts say that inflation is a big reason for the dip in stocks.
“Bear markets can be a reaction sometimes to inflationary pressures," said Anthony Conte, a financial advisor with Conte Wealth Advisors.
Anthony Conte says that the Federal Reserve will likely raise interest rates in order to combat inflation. Reports say that policymakers will like increase rates by three-quarters of a point by the end of the week.
Conte says the aggressive actions by the Fed could cause short-term pain for consumers, and possibly trigger a recession.
“For folks like you and I, it’s going to be a little tight covering the cost of groceries and the cost of gas to get from here to there. It creates a drag on the economy," said Conte.
The inflation pressures have caused residents and activist to call on legislators for more relief as part of next year’s budget.
“With food and gasoline, I would say being 30 more dollars, it’s crazy! It’s so hard and difficult," said Hilda-Mary Hernandez of Lancaster.
Hernandez says she lost her job back in January, and says it’s been difficult keeping up with increasing costs.
“Imagine not having an income and still battling with the unemployment that I still don’t have, with all the increasing cost, it’s crazy," said Hernandez.
Despite these concerns, Conte says investors are not expecting long-term inflation, and that the bear market won’t last too long.
“The hope is that the Fed can get inflation under control, before end consumers start to think that this will take hold for a long period of time.”