Despite easing inflation amid the holidays, some costs remain high

NOW: Despite easing inflation amid the holidays, some costs remain high

ST. JOSEPH COUNTY, Ind., --- This year inflation has reached a 40-year high impacting everyday expenses including prices at the pump. Although those gas prices are down amid the holidays and experts say they do expect things to get better, they still don’t know how much better.

After four straight interest rate hikes and signs of declining inflation, the Federal Reserve is not letting up raising its base rate once again.

However, the Fed has now opted for a smaller .05% interest rate hike compared to earlier .75% increases.

It's the first step toward dialing back the efforts to rein in inflation and follows a new report Wednesday showing price increases are starting to slow down.

While everyone is still facing higher costs for food and housing, gas prices are plunging, and economists expect positive economic growth in the new year.

 “It’s about time. We’ve already been struggling with many other things,” said Santana Hernandez who lives in Michiana.

Hernandez is a mother of three who said she’s happy to finally get some relief at the gas pump.

Like many she’s felt the impact of record high inflation this year forcing her to pay a lot more for everyday expenses and Christmas gifts too.

“It’s been hard, everything has gone up. There has been nothing that has really went down substantially that has eased my life or eased my kids' lives,” Hernandez said.

“Not just totally splurging because you have to almost work check to check sometimes,” added Allison Milewski, another Michiana resident.

Experts said although prices at the pump have eased along with the costs of used cars and things like healthcare and electricity, grocery prices remain 12% higher than time this last year and unfortunately may take a while to come down.

“In addition to other factors are affected somewhat from the Ukraine War at least energy we know for sure but also some of the things we buy in terms of food are affected by this as well. So, we may actually see higher food prices persist,” explained Klajdi Bregu, an Assistant Professor of Economics at Indiana University South Bend.

Despite inflation still sitting at 7.1% more than triple the Fed’s target goal of 2% economists are still hopeful more relief will come next year.

"Prices are heading down but what we are actually not sure about is how far down they’re going to go next year. It’s unlikely that we will reach what the Federal Reserve has targeted at least not for the better half of next year or so,” added Bregu.

Something that Michiana residents said would help make the holidays and the rest of the year a lot easier.

“We are never going to be back to what we used to be years ago but it would be nice to at leniency have some prices,” said Milewski.

“I’m looking forward to some change,” added Hernandez.

Professor Bregu said he’s not sure if we’ll reach the Fed’s goal of 2% inflation rate for the first half of next year, but it could be possible toward the end of the year.

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