“It means that people are going to be paying more for the things that they purchase and so, one way of thinking that is, it sort of reduces your real income. You know, your wage is just going less far than it used to because prices are higher,” said Greg Wright, an associate professor of economics at UC Merced.
“The federal reserve has a target for inflation of 2%, which is what the federal reserve believes is sort of a healthy level that will keep the economy in balance, keep inflation under control, keep employment strong,” said Wright.
“I don’t think that the Federal Reserve is going to be raising interest rates anytime soon, but they’ll certainly sort of put on pause this sort of progression of interest rate reductions,” he said.
But Wright says new tariffs and even immigration policy being pushed by the current administration will probably place some added strain on consumers. That could stop any momentum that was seen in 2024.
“People are expecting that inflation at a minimum will probably stop falling, we will probably see a sort of pause in the disinflation that we’ve seen over the last few years and possibly increased inflation over the next few months.”
Read the full centralvalley.com article here.
