Charlottesville, VA (CVILLE RIGHT NOW) – In an insightful discussion, Dr. Edwin T. Burton, Professor of Economics at the University of Virginia and Chief Economic Analyst, shared his analysis of the latest Consumer Price Index (CPI) numbers and the broader economic landscape. 

Dr. Burton began by breaking down the July CPI report, which showed an inflation rate consistent with previous months. “If you had to have a number to think about, it’s about 2.5 percent.” He emphasized that the most significant driver of inflation continues to be shelter costs, which are up at an annual rate of 5%. 

While discussing the Federal Reserve’s likely response to these numbers, Dr. Burton predicted a forthcoming rate cut. “There will be a 25-basis point cut in September. That’s 1/4 of 1%,” he explained, adding that while this won’t bring substantial relief, it will push mortgage rates lower, potentially benefiting some homeowners. 

Dr. Burton also touched on the possibility of a recession, noting that while the data is mixed, some indicators suggest a downturn could be on the horizon. “Recessions are like anything else; they have some virtues because they do serve a little bit as a washout, but they’re very uncomfortable for the vast majority of Americans.” Despite this, he acknowledged that the data does not definitively point to an impending recession, making it a situation to monitor closely. 

Dr. Burton left listeners with a cautious outlook, noting that while inflation is gradually decreasing, the potential for economic challenges remains. The full conversation can be found here: