As the United States moves farther and farther away from the COVID-19 pandemic, the cost of living remains higher. As a result of that and ongoing inflation, the Federal Reserve chose to keep interest rates at their currently higher levels, which are between 5.25 and 5.5%.

A surprising thing to note, according to Jackson Hataway with the Missouri Bankers Association, the economy remains in a relatively good position – it’s growing, albeit much more slowly.

“I think a lot of analysts expected the market to break pretty rapidly,” he explained. “You know, you expected the consumer to not be able to keep up with the pace of inflation, to have less access to liquidity and credit. You certainly expected to see commercial entities be unable to meet the kind of financing demands they have for larger projects, and instead, we really managed to keep our growth kind of where we want it to be.”

He said that the Fed is trying to restrain inflation, which causes concern for Missourians hoping for lower consumer rates.

“Most of us were anticipating a slower reduction of those rates. So, you’re going to continue to see things like mortgage and car rates stay higher than I think people would have hoped they would be about six months ago,” he explained. “But they’ll continue to normalize a little bit. Mortgages continue to spike a little bit. You know, they’re staying around that 7% range or so. That’s because the Fed has messaged out there that they’re going to hold their rates.”

The federal government injected a lot of money into the economy during the COVID-19 pandemic, and he explained that it’s very difficult to back away from that amount of stimulus quickly.

He said that businesses are not putting as many jobs out there, which is beginning to cause some shakiness.

“I think the jobs numbers are a really good leading indicator for what’s happening. You know, businesses are not putting as many jobs out there,” he said. “We’re not seeing the same kind of labor moves you saw where people are moving from one job to the next and you just happily pick the higher price point salary they wanted. So, I do think we’re starting to see signs that maybe we’re not going to have some kind of off the cliff moment that we feared five, six months ago, a year ago, but we are going to start to see things slow down.”

While inflation initially fell in 2022, it has since stalled due to the rising costs of housing and insurance rates.

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