Inflation rates in U.S. skyrocket, how it’s impacting North Dakotans

Published: Jun. 28, 2021 at 5:36 PM CDT
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MINOT, N.D. – Inflation rates in the U.S. have been on a sharp rise as the country rebuilds after the pandemic.

U.S. inflation is at 5% right now, which is the highest it has been in more than 20 years. And North Dakota residents are starting to take notice.

“It’s really kind of disturbing. I think a lot of people are having a hard time with it, the gas is going up, the groceries are going up,” said Kara Boeh, a Minot resident.

While the country recovers from the pandemic, the growing inflation is not a major concern yet to James Caton an Assistant Professor at North Dakota State University in applied economics.

“We have a lot of support provided by the Federal Reserve and this has led to, for example, a lot more money. If you look at the level of savings accounts, deposit accounts. There has been a sharp jump since the pandemic began,” said Caton.

The increase in money has resulted in low interest rates for loans.

“Financial institutions have had a lot of money to lend, which has pushed down interest rates dramatically, which is a short term gain for borrowers, but whether or not it is sustainable is a hard one to answer,” said Corey Krebs with North Dakota’s Department of Financial Institutions.

However, it is still early in the recovery phase for the economy.

“If inflation gets dramatically higher, over time the Federal Reserve will have to reduce the money supply, which will increase the cost of borrowing for all of us,” said Krebs.

Many are looking at the future of inflation rates or the Consumer Price Index to understand the fate of the nation’s financial future.

“If we see jumps in the CPI for the next couple of months, that also leads to a jump in inflation expectations, then we will start seeing impacts on financial markets,” said Caton.

Caton predicts that rates should increase for the next few months, but does not think they will impact inflation expectations too much.

The increasing need for goods and services has played a major role in the inflation rates, but are predicted to catch back up, slowing down the rate of inflation.

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