GREENVILLE, N.C. (WITN) – Consumer prices rose 3.5% from a year ago in March at a faster-than-expected pace, according to the April CPI report.

The increase means higher inflation and leaving consumers hopeless regarding the Federal Reserve cutting interest rates anytime soon.

ECU Economics Professor, Nicholas Rupp says that the Core Price Level Index, which removes food and energy prices from the CPI, is also high at 3.8%.

Rupp says prices have been in the 3.7%-3.8% range for the past two years but during the Covid-19 pandemic, inflation reached as high as 7%.

The goal of the Federal Reserve is to get inflation at 2% or less, which is where pre-pandemic inflation rates were, according to Rupp.

With inflation rates not yet at that 2% standard, Rupp says a few factors play into how the Federal Reserve will lower rates.

“Right now at 3.5%, they’re not there so the question is, how do they bring it down and they control it based on the interest rates which are currently 5.3%, the federal funds lending rate which is the highest it’s been since 2006-2007,” Rupp told WITN.

Due to that, Rupp says borrowing money during this time may cost you an extra penny.

“If you want to borrow money, they’re going to charge you more to get a loan and this is the way that the Federal Reserve influences people’s spending patterns, making it more costly to borrow money, so then people don’t spend as much money and that puts less pressure for prices to go up for things like cars, and houses, and big-ticket items,” Rupp said.

Rupp also says that the Federal Reserve is open to reducing interest rates. However, he says they have to see one of two things happen: lower inflation rates or signs that the labor market is starting to slow.

The unemployment rate is currently 3.9% according to the Bureau of Labor Statistics however, if that rate increases, Rupp says the Federal Reserve is likely to lower the lending costs and interest rates.