The Fed is expected to raise interest rates for the first time in almost four years, hoping to get control of the highest inflation in decades.
The challenge of high prices is on full display at Pizaro's Pizza in the Montrose neighborhood. While there's a healthy appetite for the signature wood-fired and Detroit-style pizzas, the classic taste comes at a price. As the government reports wholesale inflation sits at 10%, year-to-year, and that means the price for all of Pizaro's ingredients have gone up. Sometimes, by a lot.
"You're talking about $6-7-8 dollars for pepperoni for a couple ounces as a topping," says Pizaro's owner Nicole Bean, "It's, like, 'ouch', it really hurts but, at the same time, you can't get rid of pepperoni."Financial strategist Lance Roberts says the inflation problem is the result of the government pumping $5 trillion in COVID-relief money into the economy.
"The reason you hike interest rates is to make things more costly for you, so you won't buy as much, which slows economic growth, which leads to 'deflationary pressures' that lower the rate of inflation," explains Roberts. Those pressures could take some time. Financial observers are expecting three to as many as seven rate hikes in the coming year. Each will take months to trickle through the economy before prices respond. How much of a raise do you need to ask for to keep up with inflation? DailyPay's Jeanniey Walden shares her salary negotiation advice."We're not getting rich off of inflation," says Pizaro's Nicole Bean.
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