Ball State Economist: Inflation likely not going away soon

INDIANAPOLIS (WISH) — For the fifth time this year the Federal Reserve raised interest rates by 3/4 percent on Wednesday. The move makes it a little bit more expensive to borrow money or make purchases on your credit card.

The government is trying to bring down inflation by raising interest rates.

“Inflation overall has stalled over past two months, we’ve seen no monthly increases in prices over the last two months,” said Director of Ball State’s Center For Business and Economic Development, Michael Hicks.

Hicks said that by raising interest rates the government is betting that people won’t spend as much money and inflation will decrease.

“We are very conscious of our food prices, we have a food subscription service, so we have a fixed budget that we use for our food,” said Lasima Packett of Zionsville.
The increase in interest rates shouldn’t effect those who have fixed rate mortgages or car loans.

“If you have credit card debt, now is a good time to pay it off because you should be expecting higher credit card debt down the road simply because there is going to be increasing interest rates on that debt,” said Hicks.

Economists say the stimulus checks sent out during the COVID-19 Pandemic by both the Trump and Biden administrations almost two years ago is causing the inflation we are experiencing now.

It could be several months before consumers see prices go down again.

“I think the hardest thing for me and my family right now is just being on pins and needles and a little bit on edge about it. My husband mentioned just yesterday, they keep saying you know the economy is going to tank and like people are sitting around waiting on that to happen,” said Packett.

Hicks adds the government could have raised interest rates by more than just three-fourths a percent, but a dramatic increase in the rate could spark a recession.