BOSTON -- Economic and market expert Peter Cohan from Babson College sat down with WBZ-TV's Jon Keller to discuss the current economy.
Inflation has been making headlines for weeks. How long will it last?
"We are in this for a matter of years," Cohan believes.
The lecturer and author also explained whether the country is headed for a recession.
"As far as the recession is concerned, we did have the decline in first-quarter gross domestic product. If you have two quarters with declines in gross domestic product, that's one definition of a recession. Having said that, most people are downplaying the significance of that first-quarter result because consumer spending and business spending was up and the reason for the decline in gross domestic product was a decline in exports because other countries can't afford our products because our dollar is getting stronger," Cohan said.
"The whole economic situation depends upon the unemployment rate remaining low."
But will the unemployment rate go up?
"I would say make sure you have at least six to 12 months worth of cash in the bank or something really safe," Cohan said. "What I have noticed recently is that there are some companies that are laying people off. It hasn't kind of reached a wave where I think it's going to increase the unemployment rate but I have seen unprofitable companies that have reported revenue declines in the last quarter laying off lots of people."
Cohan also said he thinks mortgage rates will continue to climb, possibly to as high as 8%.
"I think that given the prices out there and if you put that on top of mortgage rates, that's going to price a lot of people out of the market. However, there's such a mismatch between the demand and the supply that I think that real estate is going to hold up for a long time," Cohan said.
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