Inflation Soars to 39-Year High

According to the Bureau of Labor Statistics, the United States’s inflation rate is eight point five percent higher than it was one year ago.

“The eight point five percent increase in year over year prices is the highest rate of inflation in forty years,” said Financial Analyst Chris Hopkins.

According to Hopkins, there are three primary reasons why this is occurring: lingering financial pressure from COVID-19, escalating food and gas prices due to the war in Ukraine, and supply shortages resulting from active COVID-19 lock-downs in China.

While the rate of inflation is higher than it’s been in nearly forty years, there are some signs that we’re at the peak and soon that rate will begin to come down.

“We’ve seen gas prices come back down a little bit in the two weeks, which is good news. And, if you exclude energy and food, you get what’s called the core inflation rate, and that was actually running at a little over three percent annual rate, he said.

However, Professor of Finance, Dr. Bento Lobo, doesn’t believe we’ve reach the peak just yet.

Rather, he believes supply side pressure will be alleviated when the war in Ukraine and China’s lock-downs subside.

“On assumption that both of those issues can be resolved in the nest few months, some of the price pressures that emerge from the supply side are likely to subside,” he said.

As for pressure on the demand side, Dr. Lobo said that rising interest rates will likely lead to a plateau in the price of commodities such as homes.

In Chattanooga, Chris Guin, News 12 Now.