With inflation higher than it has been in more than 40 years, the Federal Reserve is going to have to take some hard steps to get the situation under control, and it won’t be sweet or easy for Montana residents.
KGVO News spoke with Dr. Patrick Barkey, director of the University of Montana’s Office of Business and Economic Research (BBER) Thursday about the upcoming Economic Outlook symposium that will begin with a tour of the state next week.
Barkey was asked about the current economic picture of Montana.
“Montana’s economy is doing very well,” said Dr. Barkey. “Tax revenues are doing well. Unemployment is low. Income is high, but this growth comes with problems. There are new uncertainties out there. Most of the ink (press coverage) is about Omicron, which is certainly true. This is an uncertainty and it has had some impact on consumer spending. and travel.”
Then Barkey turned his attention to inflation and what needs to be done to control it, which is the responsibility of the Federal Reserve (FED).
“The year 2022 will be the year of further measures taken on inflation,” he said. “And just as inflation itself was unfamiliar to many young people who haven’t experienced it, so too will Fed tightening be a new experience because they haven’t done much of it either.”
Because of the pandemic, interest rates have been kept artificially low, but this is already approaching. Barkey described the impact on the economy.
“In order to get rid of some of the force of inflation, it will be necessary to increase the cost of money quite frankly,” he said. “So, those accustomed to low interest auto loan situations, low mortgage rates, and for that matter, even fast-growing stock markets like stock prices, will all move to a different environment.“
Barkey said the annual BBER Economic Outlook Symposium will begin next week, where BBER staff and special guest speakers will present their perspective on this year’s topic “Where Housing is Headed.”
“We start our tour next weekend, January 25thy in Great Falls, then on the twenty-sixth in Helena. Then on the 28thy Which is Friday, we’re in Missoula, and then the next week we’ll be in Billings and Bozeman and Butte Tuesday through Thursday, and then the next week we’ll be in Kalispell and that’s going to take us in February.”
Anyone interested in attending the Economic Forecast Seminar can click here for details and registration.
Dr. Barkey is also the author and producer of the popular Montana Economic Minute, which airs every weekday on the Montana Morning News Show.
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