The answer in part depends on how you define a recession. The traditional (U.S.) definition has been two consecutive quarters of negative growth in real GDP (Gross Domestic Product). Real GDP is the volume of output in the economy, in other words, the level of goods and service produced after inflation is removed. For example, if inflation is 5% and nominal (unadjusted) GDP rises by 2%, real GDP has actually fallen—by 3%.
When the share market is volatile in the short term, many people forget the long-term benefits of share investment. The chart below shows the All Ordinaries Index from January 1990 to now, plotted on a log scale. A logarithmic scale is designed to make similar percentage moves in the market occupy the same “space” on the chart
Since the end of 2008, the average fed funds rate has been just 0.13%. This extraordinarily low bank rate has been necessary to undo the damages caused by the GFC. But, obviously, it was never meant to be permanent. And as the US economy has recovered, so have we moved closer to the point where interest rates will have to rise.