WILKES-BARRE, LUZERNE COUNTY (WBRE/WYOU) — The Federal Reserve announced an increase in its key interest rate to help fight inflation.

“Gas is high. My electric is through the roof,” said David Lasco of Nanticoke.

Lasco spent his morning watching the numbers go up feeling the pain at the pump.

“You’re unsure of what is going to happen right now. Everything is going up in price, job security. It could be one thing. It could be another. No one knows what is going to happen within the next three months,” said Lasco.

Inflation is rocking American consumers at levels not experienced in more than 40 years. Especially Pennsylvanians who already pay 2.6 percent more than the average American.

“It’s impacting us really hard because my fiance is a small business owner. We drive around a lot. Imagine filling up $200 three times a day, the whole week. That’s a lot of money going out and not as much going back in,” said Yhaayra Sanchez, Wilkes-Barre resident.

This week, the central bank announced a rate increase of 0.75%. It’s the first time since 1994 that the fed has raised the rate that much.

“To try to damp the inflation rate in the medium term (6 months, 1 year, 2 years), the Federal Reserve has raised the interest rate with the hope that it would slow down the economy so that demand will not be as high as it is right now and prices will eventually go down,” said Professor of Global Management, Policies and Planning, Penn State, Fariborz Ghadar.

The reasons the U.S. is in this economic environment are complex but can be boiled down simply: there is too much demand and not enough supply.

“That has two reasons behind it. One is, the government spent a lot of money during the pandemic just to make sure everything would be okay. At the same time, all of the sudden, when the pandemic slowed down, everybody had all of this money and they were buying things, traveling, so the demand shot up,” said Ghadar.

His biggest piece of advice? Use less fuel walk to places nearby and carpool when you can. Therefore the demand goes down.

The full interview with Fariborz Ghadar is below: