SEMO econ prof on latest Fed comments

David Yaskewich, chairman of the Accounting, Economics and Finance Department of Southeast Missouri State University, agrees with analysts who say the Federal Reserve Board's interest rate hikes are having an effect on reducing inflation but the progress has not been deemed fast enough.

in separate appearances before the Senate Banking Committee and the House Financial Services Committee last week, Fed Chairman Jerome Powell reaffirmed his message that higher and potentially faster interest rates hikes may be on the horizon but that "no decision" has been made.

"There have been some reductions in the inflation rate on some product categories and (Powell's) testimony would have touched on this. If you look at core goods, tangible goods that exclude food and energy commodities, that broad product category has seen a considerable decline in inflation," Yaskewich said, clarifying that "tangible goods" include appliances, toys and apparel.

2% solution

Powell renewed his commitment before lawmakers to achieving a 2% inflation target. Current levels of inflation, reflected in the overall Consumer Price Index, are easily more than twice that figure.

Asked why 2% is such a desirable figure, Yaskewich said the data point is consistent with long-term growth.

"If we have inflation that's too low, it could be a sign of a slow economy," he said.

Lawmakers did press Powell on whether regulators were risking recession in their drive to temper price increases by increasing interest rates.

Bureau of Labor Statistics data show the year-over-year inflation rate, as measured by the Consumer Price index, was 6.4% in January.

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