Inflation rates fall to 2.9% for the first time since pandemic started

CHICOPEE, Mass (WWLP) – Interest rates are showing a drop to 2.9% after the consumer price growth hit its lowest level since before the pandemic.

The pandemic was a major reason for when interest rates drastically increased over the last four years. In 2019, the rates were below 2%, and in the middle of 2022, the rate reached 9%.

“Shipping lines were postponed, there were many challenges, the idea was to get money into the hands of people who needed it,” said Massachusetts Representative Richard Neal.

Now that we are working past the effects of the pandemic, people are experiencing some relief, but these high interest rates impact people in all parts of their lives.

Fast food chains, hotels and airports are all dropping their rates, trying to help people save just a little bit of money. Since inflation has been high since the beginning of the pandemic, many people have now changed their shopping habits.

“They are going more towards discounters to address the issue that some of these prices have not come down,” Neal continued.

Neal mentioned that even now with these lower interest rates, companies that raised their prices, don’t seem to be lowering them.

Another rate that we can hope to see a drop in; borrowing and loan rates.

“A few years back, you were able to mortgage, if you were lucky enough, for 2.5-3%. Now it is upwards of the high 6-7%,” said Springfield Mayor Domenic Sarno.

Representative Neal told 22News he’s hoping to see some action taken at the next Federal Reserve meeting in mid-September with the cut of interest rates.

Congressman Neal also mentioned the impact of “shrinkflation” where as the price of an item increases, the size or quantity of the product decreases. He is hoping we will be able to see some relief in the price of goods soon.

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