Montana residents can expect higher rates on auto and home loans
With inflation higher than it has been in over 40 years, the Federal Reserve will have to take tough action to bring the situation under control, and it won’t be pretty or easy for the people of Montana.
KGVO News spoke Thursday with Dr. Patrick Barkey, director of the Bureau of Business and Economic Research (BBER) at the University of Montana, about the upcoming Economic Outlook Seminar that will begin touring the state next week. .
Barkey was asked about Montana’s current economic snapshot.
“Montana’s economy is doing very well,” Dr. Barkey said. “Tax revenues are doing well. Unemployment is low. Incomes are high, but with this growth come challenges. There are new uncertainties here. Most of the ink (press coverage) is about Omicron, and that’s certainly true. It’s an uncertainty and it’s had some impact on consumer spending and travel.
Barkey then turned his attention to inflation and what needs to be done to bring it under control, the responsibility of the Federal Reserve (FED).
“2022 will be a year of additional measures against inflation,” he said. “And just as inflation itself is unfamiliar to many young people who haven’t experienced it, the Fed’s tightening will be a new experience because they haven’t done much either. “
Due to the pandemic, interest rates have been kept artificially low, but that is already coming to an end. Barkey described the effect this will have on the economy.
“In order to dampen some of the inflation steam, frankly, the cost of money will have to be increased,” he said. “So those who have become accustomed to situations of low interest car loans, low mortgage rates and, for that matter, even fast growing stock markets such as stock prices, are all going to move in a different environment.”
Barkey said BBER’s annual Economic Outlook Seminar will begin next week, as BBER staff and special guest speakers will present their views on this year’s topic “Where’s Housing Going.”
“We start our tour next weekend, January 25and in Great Falls and then the 26th in Helena,” he said. “Then on the 28thand which is Friday we are in Missoula, then next week we are in Billings, Bozeman and Butte Tuesday through Thursday, then the week after we are in Kalispell which will bring us into February.
Anyone interested in attending the Economic Outlook Seminar can click here for more details and to register.
Dr. Barkey is also the author and producer of the popular Montana Economic Minute, which airs weekdays on Montana Morning News.