CLEVELAND — There are economic issues impacting Wall Street, the Federal Reserve, or Congress that most Americans are never fully aware of, inflation for certain isn't one of them. What you see, feel, and pay is often a precursor of what is to come.
"I know gas prices are out of control but the food prices are ridiculous," said John Higgins of Cleveland. For him, it's a question of simple math. Money coming in, slower than it's going out. "The cost of living is going up quicker than the cost of, than salaries you know so it's hard to keep up."
The rising price of fuel is the common denominator. The higher it goes, the more you pay and the more the movers of the products you buy pay - a cost they then pass on to you. Combatting inflation involves reining in the economy on the part of the Fed which they do by raising interest rates. It's a balancing act that impacts the markets.
"And really what we're seeing in say the markets now is testing how much that reigning in is going to have an effect," said Jonathan Ernest from Case Western University's Weatherhead School of Management. Do it too little inflation continues to rise, do it too much we're looking at a recession, which many economists believe at this point is likely in some form. "It's looking more and more likely that there may be a mild recession that will see that slow down because as the Fed tries to reign things in essentially we're making it more expensive to borrow, to invest in capital, to produce things."
Senator Rob Portman (R-OH) appearing on Wednesday agreed.
"Well we had negative growth in the last quarter as you know and if we have another quarter of negative growth that technically is a recession," Portman said. "I don't know, no one does but when you look at the numbers right now and you look at what the Fed is doing raising interest rates which they have to do to try to calm inflation, the effects that's going to have on consumer spending... I think it's more likely than not that we're going to have another quarter of economic growth that is negative."
U.S. Secretary of Transportation Marty Walsh tells News 5 "I don't like using the recession word, I think that we can continue to have a strong economy."
That involves continuing to address supply chain issues, continue to create jobs and make the best of the issues beyond the administration's control like the war in Ukraine.
"Obviously this is something that the president has been focused on, the administration's been focused on," he said. "I think the biggest key for us right now is continue to bring these pressures down at the kitchen table for folks."
This week marks six months since the passing of the $1.2 trillion Infrastructure Act, we asked Walsh if that too leads to feeding inflation?
"I don't think so, when I think of infrastructure as whether it's a local official or people living in communities it's better connectivity, it's better opportunities to enhance and advance your business communities. When you think of broadband access and having more people connected to the web, those are all good things," he said.
As for your 401K, Case's Jonathan Ernest said depending on how close you are to retirement, the best advice might be for now to look away.
"I think especially right now that's sort of the advice for most people, in most stages with their 401Ks. It's a long-term instrument that you have. If you look right now at it and say wow it's down, maybe yours is down 20%, it's sort of the worst time to try to bail out."
