NASHVILLE, Tenn. (WTVF) — In August, inflation increased but gas prices dropped, according to a new report from the United States Department of Labor.
On Main Street in East Nashville, drivers flocked to get gas for $2.94 a gallon for regular.
"I commute quite a bit. I’m a handyman right now, so I’m going anywhere from 50 to 100 miles a day, so it’s a huge issue for me," Dominic Savoldelli said. "Definitely a big break."
Savoldelli said he saw the cheap price on Google Maps so he drove to the gas station.
"Great deal, love to see it," Savoldelli said.
While gas prices have dropped, the cost of food, housing, and medical care went up. Inflation increased 0.1% in August and 8.3% in the last year, according to a Consumer Price Index report released Tuesday.
"We always like to think that prices are sticky because once they go up, it is harder for them to go down," Julio Rivas said.
Rivas is a finance and economics professor at Lipscomb University. He thinks interest rates will rise soon.
“Now on the other hand, implications of increasing the interest rate is that everything is going to be more expensive in terms of financing,” Rivas said. “So if you want to get a mortgage, if you want to get a new car, anything that involved a loan, it’s going to get more expensive because interest rates go up.”
The goal is for inflation to go down.
"Every time there’s an increase in interest rates, the stock market reacts negatively," Rivas said.
Next week, the Federal Reserve has a meeting scheduled on interest rates.
"What I see is, the Fed is going to increase the interest rates, they’re going to have a more aggressive approach towards this problem," Rivas said.
