DAYTON, Ohio (WDTN) — The Federal Reserve Strikes again with its seventh interest rate hike this year. This latest hike was smaller, only going up half a percent to 4.25 – 4.5 percent.

Dr. Jeff Haymond, an economics professor at Cedarville University, said this does not mean the Fed will be letting up in 2023.

“They’re talking tough, and they are acting tough. The money supply numbers have been falling rapidly. I think the markets better start taking Mr. Powell seriously,” Dr. Haymond said.

The latest hike means people can expect to pay more when borrowing money for things like cars, homes, and large purchases, like appliances. People can also expect to see larger interest rates on credit cards.

“The Fed is trying to slow down the rate of borrowing, so we will be incentivized by their policy to not borrow as much to consume today and promise to pay back tomorrow. Because it’s precisely all this additional consuming today that’s causing this inflationary spiral,” Dr. Haymond said.

This comes as we are still seeing record high inflation. Dr. Kevin Willardsen is an associate professor of economics at Wright State University. He said while inflation dropped to a little more than seven percent, it is not all good news.

“We’re not out of the woods with respect to inflation, but it does mean that at least all of the new information that we’re getting is positive relative to the inflation story but that we also have a long ways to go,” Dr. Willardsen explained.

The Fed wants to get inflation down to two percent, but some lawmakers, like Sen. Sherrod Brown (D-Ohio), believe raising interest rates is only part of the solution.

“We have a responsibility to go after those companies that, frankly, have used the pandemic to raise prices and increase profits at the expense of the American public. That’s a big part of this equation,” Sen. Brown said.

Others, like Sen. Rob Portman (R – Ohio), said the country needs to focus on increasing production to help bring down the price of goods.

“If you increase the supply of energy, that of course affects everything because it affects transportation, it affects the cost of clothes, the cost of food, everything else. So that’s what I think we ought to be doing, is focus on sort of pro-jobs, pro-growth policies to get the supply side up and then the inflation will go down,” Sen. Portman explained.

As the Federal Reserve looks at more hikes in 2023, Dr. Willardsen said we can expect to see these high prices stick around for a little while longer.

“For the last two years, we printed a lot of money because we didn’t want to go through the hardship of the economic crisis and the pandemic. But again, this iron law of economics, costs can’t be avoided, they can only be shifted. And we shifted a lot of those costs to right now,” Dr. Willardsen said.