It’s been a week to remember, as the stock market made big swings.
The Dow Jones Industrial Average surged 373 points today.
People are wondering if more interest rate hikes are coming and if their money is safe in banks.
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Channel 2′s Justin Farmer spoke with Atlanta-based Oxygen Financial CEO Ted Jenkin about the subject.
“Well let’s just talk about the banking crisis here for a second and remind people that if your bank statement says you have $100,000, there isn’t $100,000 in the bank. What banks do with your money is, they loan it out,” Jenkin said.
Jenkin said the best thing for people to do is to ask their bank if they have FDIC insurance.
“And then from there, you may want to ask them, ‘What do you do with my money?’” Jenkin said.
“Farmer asked Jenkin if people’s money is still safe in the bank.
“Yeah, I think so, I mean look - for most people in America, if you have less than $250,000 in the bank, you’ve got FDIC insurance. And I don’t see that FDIC insurance is going under,” Jenkin said.
“For our viewers that are sitting on ‘X’ amount of dollars in their 401k, relying on that money when they hit their 60s, 70s, or beyond... what would your advice be today?” Farmer asked.
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“Well, I think if you’re going to put money in the stock market, you should have five years or more. So if you need this money in the next six months or a year, it may be a better time to put the money into safer assets,” Jenkin said.
“Ted, from where you sit, this is quite different than ‘08, correct? Meaning even if we hit a recession, would you guess at this point may be much more shallow than what we experienced in ‘08/’09?” Farmer asked.
“Yeah I think if we dip our toe in a recession it will be a mild recession because the problem in 2008 is that banks handed out money like candy and we made a lot of bad loans and that isn’t the case today,” Jenkin said. “The economy is very strong, unemployment is low right now, yes inflation is high but it’s coming down and this is not the same scenario as 2008.”
The Fed meets next week to announce its latest move which most analysts believe will be a quarter-point hike and then that would be it for a while in terms of raising rates.
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