Consumers brace for another hike in federal interest rates
MINNEAPOLIS -- Stocks fell again Tuesday ahead of the Federal Reserve's impending announcement on interest rates. This week's losses come on worries that high inflation will push the central bank to hit the brakes too hard to slow demand.
Something else aimed at easing inflation is heading to the President's desk, a bipartisan piece of legislation on shipping reform. The measure, sponsored by Sen. Amy Klobuchar, gives the U.S. more power to regulate international shipping.
Consumers in St. Louis Park are feeling the pain.
"The prices are going up up up through the roof," Brandon Hole said.
"When I check out I cant believe I just spent $80 and I have one bag," Lynn Von Eschen said.
Among the factors fueling inflation are shipping backlogs and supply chain problems.
"These international conglomerates are charging too much, charging too much for Minnesota manufacturers, for farmers, and so by bringing those prices down it helps them to bring their prices down for consumers," Klobuchar said.
In another effort to reign in inflation, the federal reserve is expected to raise interest rates at its meeting this week. But an interest rate hike represents a double-edged sword for consumers, because that will lead to increases on everything from interest rates on credit cards to mortgage payments.
"The consensus forecast could be about three-quarters of a percentage point," Professor George John said. "I hate to say this. It still won't make much of a difference."
John says causes of inflation are so broad, interest rate hikes and legislation are unlikely in the short term to keep prices in check.
In St. Louis Park consumers offered their solutions
"Honestly I have been looking at TikToks on how to grow your own produce, because it is getting so expensive to buy it at the store," shopper Julia Olson said.
We should learn much more Wednesday as the Federal Reserve meets for a second day. That's when they are expected to raise interest rates.