Economists see no end in sight for spiking prices

HUNTSVILLE, Ala. (WAFF) - Prices for everyday items we rely on continue to increase. The Federal Reserve hopes by raising interest rates they can combat the issue that has been putting a dent in your wallet.

“Honestly we really don’t see a light at the end of the tunnel,” University of Alabama in Huntsville Economics Professor Dr. Wafa Orman said.

Next week, the Federal Reserve is expected to raise interest rates once again. The increase in rates is to hopefully bring down the cost of everyday items.

“So hopefully that will have an effect. It’s not clear when. They don’t want to press the brakes on everything because that will raise unemployment and we don’t want that.”

Dr. Orman said the rise in interest rates is putting people back to work.

“Sort of gradually raising interest rates and let unemployment remain low,” Dr. Orman said. “It is around 3.6 percent which is fantastic, but we have this big other problem.”

Dr. Orman said a major factor contributing to the increase in interest rates is the supply chain bottleneck.

“The conflict between Russia and Ukraine is still going on and there is a lockdown in a number of Chinese cities. So she expects inflation to remain high for some more time.”

With no end in sight, Dr. Orman said you need to continue to plan financially.

“This is definitely going to put a damper on spending, so if you can plan,” Dr. Orman said. “Build up your savings account to the extent that you can. If you can’t put off borrowing for major purchases do it right now before rates go up again or wait a couple of years.”

Copyright 2022 WAFF. All rights reserved.