Why Clark Howard Thinks Inflation Will Go Down Soon

Although inflation over the past several months has forced Americans to pay more for goods and services, money expert Clark Howard says we may soon get some relief.

He predicts inflation will start declining soon because of measures being implemented by the U.S. government, including interest rate hikes, the latest of which is expected to be announced today.

Some Inflationary Pressures Have Eased

Clark notes that inflation is already showing signs of receding in certain sectors of the economy.

“We’re going through a rotation with inflation,” he says. “A lot of the things that really were engines for inflation have settled down. Goods-based inflation overwhelmingly has been squeezed out: things, ‘stuff.’ A place to live — housing prices that went up, up, up and away, whether for purchase or rental — that has now changed.”

Although that’s good news, Clark points out that the one key sector of the U.S. economy that continues to maintain stubbornly high pricing is “anything to do with services.”

One Sector Where Inflation Continues

Service industries have had a tough go of late because higher costs have had to be passed on to the customer, Clark says. Additionally, many people have changed jobs and/or are asking for more money.

“As the cost pressures have hit people, people have needed to make more money in their lives,” Clark says. ‘The job market has been so very strong. People have been out seeking more money … and in the service side of the economy, labor costs are so much of the overall cost of owning a business.”

How the Federal Reserve Plans To Attack Inflation

The Federal Reserve is poised to raise interest rates again to curb inflation. Clark says this is a necessary step.

“The Federal Reserve is going to have to keep trying to put the brakes on the economy … slow down the economy in order to get rid of the services inflation. And so, it’s going to hurt,” he says. “Depending on where you sit in this economic mix, you’re going to feel some of that.”

But Clark sees good news on the way. He predicts that there won’t be a prolonged, brutal economic cycle.

3 Money Moves To Beat Inflation

So with interest rates set to rise, you may be curious to know what you can do to keep more of your money.

Manage Your Spending

One way to manage your spending is to take a good look at how much money is going out versus what you're bringing in. Create a budget if you don't have one.

ExploreRead our guide on how to reduce expenses with several small changes and a few big ones.

Get Out of Debt

Try to get out of debt, especially credit card debt, as you can expect any variable interest rate you're paying on credit cards to rise in the wake of the Federal Reserve's rate hike.

The first step to getting out of credit card debt? Stop buying things with your credit card. It may be difficult, but you can do it!

ExploreRead our guide on how to eliminate credit card debt.

Save at the Grocery Store

It's been tough to get a break on grocery prices as food costs continue to rise. Save money by making a conscious effort to look at the weekly sales that your local grocery store has and shop accordingly.

Don't forget to comparison-shop by going to competitor websites or grocery apps. You can also use unit pricing to confirm whether you're getting a deal or not.

Read our guide on how to save on groceries.

Final Thoughts

Clark says, as bad as inflation has been for your wallet, things will turn around at some point in the near future.

“You’re going to see the improvement, barring some really unexpected increase in war activity in Europe or elsewhere. We’re going to get the U.S. economy under control,” he says.

ExploreThis article was originally published on Clark.com

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