Seeing how interest rates are affecting local prices
IDAHO FALLS, Idaho (KIFI) - With the Federal Reserve meeting in Washington Wednesday, interest rates are on the minds of Americans.
According to University of Idaho economics professor Steven Peterson, the central banks will be able to break inflation by raising interest rates.
The Fed has been trying to curb inflation by raising rates since last March.
The goal is to indirectly slow consumer spending by making it more expensive to borrow money.
The Fed chose to pause interest hikes for now but may chose to increase rates once again when they meet in December.
Local economy impact
According to the U.S. Bureau of Statistics, the price of food is up nearly 4%.
The national average for a gallon of whole milk sits $4.34 according the United States Department of Agriculture. Idaho's average sits below that at $2.96 per gallon.
Housing in Idaho is also on an uphill climb, but the supply and demand situations vary by city. Theresa McKnight, a regional economic developer, says she has seen reason to be hopeful for the Idaho housing market despite the trend.
"Even though we have all experienced an increase in the cost of housing, we are still below the national average," McKnight said. "Some of those that were born and raised here have never probably witnessed the increase of the cost of housing that we've seen over the last year or two."
As for the auto industry, Sean Layton at the Tadd Jenkins Chevrolet in Rigby says car prices have felt more pressure from the pandemic and auto workers strikes than from interest rate hikes.
"They've largely remained the same," he said. "They haven't gone up. They might go up a little bit just with the cost of living and increase in wages and inflation. But by and large, they've stayed the same."
