Federal Reserve puts pause on interest rate hikes
ST. LOUIS PARK, Minn. -- The Federal Reserve did what it had been signaling for weeks -- a pause in interest rate hikes. But it also warned to brace for more hikes this year.
"That is always going to be an option and if things were going to present themselves in a very dire way, yes, the Federal Reserve could be cutting interest rates sooner rather than later but that is not the outlook," said Mark Hamrick, senior economic analyst with Bankrate.
The news comes as inflation is cooling.
"For the overall inflation numbers, they've been driven these last couple months and for a while by oil prices falling. They've fallen much faster, and it's been much more dramatic than say food," said Mark Bergen, marketing professor at the University of Minnesota's Carlson School of Management.
But have consumers noticed?
"Some are coming down, I'm not going to lie," said MK Mohamed, a personal shopper for Instacart in St. Louis Park.
"Maybe a little bit, I feel like it came down a little bit but not that much," said Tashi Phunstock, a shopper from St. Louis Park.
Phuntsok, like many shoppers, can't pinpoint items that have dropped in price -- but he can tell you what is costing more, like the bag of ice he is grabbing for his cooler.
"It's like three dollars, thirty cents. It used to be two dollars," said Phuntsok.
"We always used to call this asymmetric pricing, that prices rise like rockets, and come down with parachutes and food would be one where you're starting to see it coming down. It's coming down slowly," said Bergen.
While inflation is at about half what it was at its peak last year, you're still going to find varying prices at the grocery store. In fact, month to month ground beef is up 17 cents per pound. Chicken doing a little bit better, that's down 11 cents per pound. Eggs are down 61 cents per dozen.
"Remember inflation is an aggregate of all we buy. As a shopper we want to be looking at both what goes up and what goes down to get a sense under that aggregate number," said Bergen.
Last month, Minneapolis and St. Paul had the lowest inflation rate among other major metros.
The Consumer Price Index went up just 1.8% in the Twin Cities year over year.
"You don't want disinflation though in the sense of prices cratering which would be associated with a recession," said Hamrick.