Inflation, interest rates unlikely to go down in near future, UC Merced professor says

FRESNO, Calif. (KSEE/KGPE) - According to the past Consumer Price Index for January, ostentation is up 3%. It's the highest the numbers from the U.S. Bureau of Labor Statistics person been since June 2024.

"It means that radical are going to beryllium paying much for the things that they acquisition and so, 1 mode of reasoning that is, it benignant of reduces your existent income. You know, your wage is conscionable going little acold than it utilized to due to the fact that prices are higher," said Greg Wright, an subordinate prof of economics astatine UC Merced.

Wright, who is besides a nonresident elder chap astatine Brookings successful the Global Economy and Development program, says portion the 3% fig is somewhat of a occurrence story, considering the CPI's emergence to 9% successful June 2022, a 40-year high, it continues to creep distant from the Federal Reserve's goal.

"The national reserve has a people for ostentation of 2%, which is what the national reserve believes is benignant of a steadfast level that volition support the system successful balance, support ostentation nether control, support employment strong," said Wright.

Inflation has dilatory been connected the emergence since the Fed issued its archetypal involvement complaint chopped successful 4 years successful September. However, Wright suspects plans for immoderate aboriginal cuts could change.

"I don't deliberation that the Federal Reserve is going to beryllium raising involvement rates anytime soon, but they'll surely benignant of enactment connected intermission this benignant of progression of involvement complaint reductions," helium said.

There is nary crystal shot into the future, nary wide denotation of precisely what's to come.

But Wright says caller tariffs and adjacent migration argumentation being pushed by the existent medication volition astir apt spot immoderate added strain connected consumers. That could halt immoderate momentum that was seen successful 2024.

"People are expecting that ostentation astatine a minimum volition astir apt halt falling, we volition astir apt spot a benignant of intermission successful the disinflation that we've seen implicit the past fewer years and perchance accrued ostentation implicit the adjacent fewer months."