‘Don’t lose faith in the American consumer’ | Inflation impacts East Tennesseans

KNOXVILLE, Tenn. (WVLT) - The Federal Reserve Bank is considering increased interest rates to cool down this hot economy, according to Thomas Goldsby, the Haslam Chair of Logistics at the University of Tennessee’s Haslam College of Business.

“If I take one thing away from the past couple of years, living in COVID is that don’t lose faith in the American consumer,” Goldsby explained.

Goldsby said there’s talk of not only one interest rate increase this year, but Goldsby said some experts said possibly up to seven increases, which is highly unusual.

“Employment is really good. Wages are up. People are spending. And I think that’s something that’s remarkable even with inflation up 7% last month, spending was up,” said Goldsby.

Inflation is impacting a lot of sectors including: vehicles, houses, groceries and gas.

“People tend to look at inflation as a really bad thing and it is. It certainly doesn’t take our dollar quite as far. But from an economic reading, it’s not entirely bad. Because it does mean the people are looking to buy goods.”

Fuel is the primary energy source for our supply chains.

When gas prices go up, the prices of virtually everything else does too.

He said if Putin’s Russian troops cross the line into Ukraine, that could send dramatic shockwaves into the energy sector.

“Now there’s talk of maybe reducing fuel taxes to try to offset some of those prices. But again if there’s global conflict you can bet those fuel prices are going to see a dramatic surge and that could be sustained for some time,” said Goldsby.

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