Consumers brace for another federal interest rate hike – WCCO
MINNEAPOLIS (WCCO) — Stocks fell again on Tuesday ahead of the Federal Reserve’s looming interest rate announcement. This week’s losses were driven by fears that high inflation would cause the central bank to apply the brakes too hard to slow demand.
Something else aimed at mitigating inflation is heading to the president’s desk, a bipartisan shipping reform bill. The measure, sponsored by Senator Amy Klobuchar, gives the United States more power to regulate international shipping.
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Consumers in St. Louis Park are feeling the pain.
“Prices are skyrocketing,” Brandon Hole said.
“When I leave, I can’t believe I just spent $80 and got a bag,” Lynn Von Eschen said.
Among the factors fueling inflation are shipping backlogs and supply chain issues.
“These international conglomerates are charging too much, too much for the manufacturers in Minnesota, for the farmers, and so by lowering those prices, it helps them lower their prices for consumers,” Klobuchar said.
READ MORE: Federal Reserve set to raise interest rates to curb inflation
In another effort to tame inflation, the Federal Reserve is expected to raise interest rates at its meeting this week. But an interest rate hike is a double-edged sword for consumers, as it will lead to increases on everything from credit card interest rates to mortgage payments.
“The consensus forecast could be around three-quarters of a percentage point,” Professor George John said. “I hate to say that. It still won’t change much. »
John says the causes of inflation are so broad that interest rate hikes and legislation are unlikely to control prices in the near term.
In St. Louis Park, consumers offered their solutions
“Honestly, I’ve been watching TikToks on how to grow your own produce because it’s getting so expensive to buy it from the store,” customer Julia Olson said.
NO MORE NEWS: Portion control, raising interest rates among limited options to stop inflation
We should know a lot more on Wednesday as the Federal Reserve meets for a second day. This is when they are expected to raise interest rates.