WLWT: Will an interest rate pause provide relief for shoppers?

Lindner economist explains the Federal Reserve’s recent interest rate decision

Michael Jones, PhD, Carl H. Lindner College of Business associate professor of economics and academic director of the Kautz-Uible Economic Institute, reflected on the Federal Reserve’s decision to not raise interest rates after 10 consecutive rate increases.  

Consumers are taking creative measures to stretch their dollars as record inflation continues, with a 4% increase in the year ending in May, according to the Bureau of Labor Statistics’ Consumer Price Index released on Tuesday. But shoppers may find relief soon after the Federal Reserve’s recent action — or, rather, inaction.  

michael-jones-headshot-2021

Michael Jones, PhD, associate professor of economics and academic director of the Kautz-Uible Economic Institute

After the release of the country’s latest inflation figures, the Federal Reserve decided to halt its historic pattern of increases to allow its previous changes to achieve maximum economic impact.

“The Fed has paused to let more data come in. So, are we seeing the inflation numbers — we know it went from 9 to 4 ... is it going to drop under 4% (in) the next month?” Jones explained to WLWT reporter Todd Dykes. “And so, this pause gives the Fed a chance to just see the data.”

To lower inflation below its 2% target, the Federal Reserve has been steadily raising interest rates — now at a high between 5-5.25%.

“It's been 25, 50 basis points every time that they've met,” said Jones

WLWT has more on what consumers are doing to cope with current economic conditions and what to continue to expect from the Federal Reserve.

Featured image at top: Federal Reserve building facade. Photo courtesy of Adobe Stock.

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