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It’s been a tough year so far for the economy and the stock market. Inflation is high and interest rates have been rising; digital currency prices have plummeted; and the S&P 500 recently approached a bear market, the industry label for a drop of 20 percent or more from its most recent high. Investments, at least in the short term, have generally headed lower, leaving many readers concerned that the United States is on the verge of another recession.
Jeff Sommer, who covers markets, finance, and the economy in his Strategy column for The New York Times, tries to put the ups and downs into perspective. In an interview, he talked about what it has been like to report on a market that has caused a panic among many investors. This interview has been edited.
How did you start covering the stock market?
Earlier in my career, I came to The Times as a National Section Editor and then became a Business Section Editor. I found it interesting enough to go back to school. I started writing the Strategies column sometime during the financial crisis of 2008.
Have you seen any trends that have changed the way you cover the markets?
The role of the Federal Reserve has become quite central. There is an adage: don’t fight the Fed, which pretty much means that if the Fed is putting money into the economy, that will cause the stock market to skyrocket. And if the Fed is tightening, as it is now, that is going to create a dip. Starting with the financial crisis around 2008, the role of the Fed has been gigantic.
Are there other trends? I know that social media is starting to play a bigger role.
The so-called meme actions are a direct consequence of that. Robert Shiller, the Yale economist who studied this and won a Nobel Prize, had this notion that “narratives” spread. This has always been the case, but with social media it’s like wildfire. I think that’s one of the potential problems now.
What is the mission of the Strategies column?
The overall goal is to educate people about the market and allay any fears they may have. I try to give perspective to people who probably need to be in the stock market for a long time if they hope to save money. But on the other hand, they are very vulnerable. So how do you handle that? I am much more interested in the millions of people who are in that situation.
We are still in a pandemic; there is a geopolitical crisis involving a nuclear power; America’s relationship with China is questionable at the moment. And the United States has many internal political divisions that are well documented elsewhere in The Times. If you add all that, you can become very pessimistic. I think it is an act of faith to continue investing for the long term. I try to point out what can be known and what cannot.
How do reader comments shape your reports?
I have received feedback from readers for years; right now we are actively suggesting that people write. In the last 10 days, I have received about 250 direct questions from different people. I don’t necessarily know what people know and don’t know; I have to keep remembering that there are new generations, which is something beautiful.
Many of the comments ask me to explain more simply. The more I do this, the more I try to break things down: What’s the logic here? What am I assuming? I’m trying to explain what that assumption is and see if it makes sense.
I am well aware of the fact that this is The New York Times. People trust The Times. Many people trust me. I don’t want to disappoint anyone.
What do you do if you’ve been saving all your life and you’re faced with this now? How long do you last? If you read a couple of the pieces that I’ve done lately, I’ve tried to write there very carefully, don’t invest in the stock market if you need the money.
As a journalist, I have different roles. If I write straight news that looks unrelentingly bleak, I try to come back fairly quickly with a column that puts it into perspective. In the column, I am allowed to give a perspective that is mostly based on facts. But like I said, part of it is faith that the world will go on, that the financial system will hold together, that the markets will eventually go up.