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Putting the Markets in Perspective

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It’s been a difficult year so far for the economy and the stock market. Inflation is high, and interest rates have been rising; digital currency prices have plunged; and the S&P 500 recently approached a bear market, the industry’s label for a drop of 20 percent or more from its most recent high. Investments, at least in the short term, have generally been headed down, leaving many readers worried that the United States is on the precipice of another recession.

Jeff Sommer, who covers the markets, finance and the economy in his Strategies column for The New York Times, tries to put the highs and lows in perspective. In an interview, he discussed what it has been like to report on a market that’s caused panic for 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 an editor on the National desk and then became an editor on the Business desk. I found it interesting enough that I went 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 markets?

The role of the Federal Reserve has become quite central. There is an adage: Don’t fight the Fed, meaning more or less that if the Fed is putting money into the economy, that’s going to set the stock market running high. And if the Fed is tightening, as it is now, that’s going to create a decline. Starting with the financial crisis around 2008, the role of the Fed has been gigantic.

Are there any other trends? I know social media is starting to play a bigger role.

The so-called meme stocks are a direct outgrowth 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 true, but with social media it’s like a wildfire. I think that is one of the potential issues now.

What is the mission of the Strategies column?

The overall goal is to educate people on the market and assuage any fears that they may have. I try to give a perspective for people who probably need to be in the stock market for a very long time if they hope to save money. But on the other hand, they’re very vulnerable. So how do you manage that? I’m much more interested in the millions of people who are in that situation.

We’re still in a pandemic; there’s a geopolitical crisis involving a nuclear power; the United States’ relationship with China is questionable at the moment. And the U.S. has plenty of internal political divisions that are well documented elsewhere in The Times. You add all that up, you can get very pessimistic. I think it’s an act of faith to keep investing for the long term. I try to point out what is knowable and what isn’t.

How do reader comments shape your reporting?

I’ve received reader comments for years — right now we’re actively suggesting that people write in. In the last 10 days I’ve received maybe 250 direct questions from different people. I don’t necessarily know what people know and what they don’t know; I have to keep remembering that there are new generations, which is a beautiful thing.

A lot of the comments are asking me to explain more simply. The more I do this, the more I’m attempting to break things down: What is the logic here? What am I assuming? I try to explain what that assumption is and see if it makes sense.

I’m very conscious of the fact that this is The New York Times. People trust The Times. A lot of people trust me. I don’t want to let anyone down.

What do you do if you’ve been saving all your life and you’re facing this now — how long do you hang in? If you read a couple of the pieces I have done lately, I have tried to write in there very carefully, don’t invest in the stock market at all if you need the money.

As a journalist, I have different roles. If I do straight news stories that look rather relentlessly grim, I try to come back fairly quickly with a column that puts it in perspective. In the column, I’m allowed to give a perspective that’s based mainly on facts. But as I said, some of it is on faith that the world will continue, that the financial system will hold together, that the markets will ultimately rise.


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