SEMO's David Yaskewich on inflation 'cooling'

Southeast Missouri State University economist David Yaskewich says while the issue is complex, last week's numbers on inflation are unquestionably a positive sign for consumers weary of higher prices.

"If we look at (the cost of) food and energy, which would be part of the headline numbers for inflation (last) week, we're at 4%. That's a story of good news," said Yaskewich, chairman of SEMO's Accounting, Finance and Economics Department, commenting on the modest 0.1% rise in May's consumer price index. "Although we're not done in seeing a return to normalcy, we need to remember the peak of inflation was 9.1% in summer 2022, so this is progress. We'll celebrate the little victories as they come."

Federal Reserve Board chairman Jerome Powell announced Wednesday, June 14, the Fed's target remains wrestling inflation down to a 2% level and said the Fed is "pausing" its pattern of interest rates hikes.

Powell said for the first time in 15 months, the Fed will not raise rates, bringing a measure of relief to consumers dealing with pricier mortgages, credit card debt and other loans.

In housing, the difference in borrowing costs has been stark.

In early 2022, the rate for a conventional 30-year mortgage averaged 3.2%, while today it is 6.8%.

In real terms, the monthly mortgage on a $300,000 home has gone up 50%.

Annual percentage rates on credit cards has hit record highs and, in some cases, tops 20%.

"I think there is some impatience and disappointment that inflation has remained as high as it has been for so long. People are getting fatigued, but progress is being made, although it's a little sluggish," said Yaskewich, who has been on SEMO's faculty for nearly 11 years.

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