LETU professor discusses economy, interest rates
LONGVIEW, Texas (KLTV) - East Texans have concerns over whether inflation is inevitable in the current economy, and what that will mean for working people.
After the pandemic and trillions in relief and infrastructure government spending, where is the economy headed?
From fuel to food to lumber, the worry is that possible inflation could send prices to budget affecting levels.
“Prices go up how’s everybody going to live on $7.25 an hour,” said one Longview worker.
LeTourneau university professor John Barrett says the pandemic was mostly responsible for runaway prices in oil and lumber.
“In part because of some of the country’s trade policy’s, and part because of the supply chain interruptions from the pandemic,” he says.
“Gas prices! Filling up twice a week it’s like 40 dollars , now it’s 60 dollars every time you turn around,” said real estate agent Hannah Gossage.
Barrett says now is actually a good time to borrow.
“There’s a lot of good signs the economy is coming out of the pandemic. Good to kind of go ahead a pull the trigger on borrowing some money while rates are low,” John says.
But fears are that trillions in government spending will spark runaway inflation.
“There’s a lot of stimulus money coming into the economy and certainly a lot of debt being racked up by the federal government. We don’t have to worry at this point with hyper-inflation. You generally want a little inflation in your economy, you just don’t want too much,” Barrett says.
To some like ‘Eagle Capital’ in Longview, it’s the interest rate their watching.
“It’s got to affect the bond market and interest rates. We’ve already seen interest rates go up a little bit,” says Bill Rice of Eagle Capital.
Inflation is not if, but when.
“At some point you start to get concerned and that’s when they start to raise interest rates,” Professor Barrett says.
Meanwhile as far as high asking prices and multiple offers for sellers in real estate, Barrett says the marketplace is establishing what the basic new value is.
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