University of St. Thomas economist says this week’s economic reports are very important

On Tuesday, the latest information on the inflation rate will come when the Consumer Price Index comes out and the next day, Wednesday, the Federal Reserve Board will meet to discuss what direction it will take with interest rates depending on what the CPI reports show.

Inflation has come down slightly in recent weeks, but only a little more than 1%.  It’s roughly 7.8% compared to 9% a short time ago.  The Federal Reserve has also initiated four consecutive interest rate hikes leading up to Wednesday’s meeting.

University of St. Thomas economist, Tyler Schipper, told 5 EYEWITNESS NEWS “there have been some improvements” with the decreasing costs of gas, wheat and even chicken over the past several weeks, but he cautioned that inflation numbers still remain “precarious” because big-ticket purchase items, like housing, have not gone down.

“Housing prices have continued to go up, without any slowing down whatsoever. So, there is still concern in those prices,” said Schipper.  “It’s certainly better than it would have been three months ago. But, I still think the word precarious is the best way to describe prices right now.”

Schipper told KSTP economic numbers with the CPI this week will be something financial markets will watch very closely as the Federal Reserve meets the following day to consider a likely interest rate hike.

“Right now, the good money is on they’ll raise it by a half-percent,” said Schipper.  “But, for instance, if there’s a higher inflation number that comes out on Tuesday, you might see them revert back to that three-quarters of a percent and that would probably be a very bad day for markets.”