'Looks Like The Value Of The Dollar Is Going Down': Californians Cut Back On Spending Amid Soaring Inflation

WEST SACRAMENTO (CBS13) – As the Federal Reserve tries to calm inflation with its latest interest rate hike, Californians are tightening their wallets.

Economists say the three-quarters of a percentage point interest rate increase is needed to cool the economy — but shoppers say they are feeling the squeeze.

"It looks like the value of the dollar is going down," said Daniel Pedersen before he went grocery shopping.

With inflation currently at 8.6 percent, people are adjusting their spending habits.

"I buy a lot of frozen vegetables," Rena Lewis said. "I'm not buying them [fresh] because they're just too expensive. I'm actually saying they can rot right there in the store."

However, if people need a particular item, they are on the prowl for deals.

A Washington Post and George Mason University poll found nearly nine in 10 Americans say they started bargain-hunting for cheaper products.

For some, this might mean a trip to a discount store.

"I probably shop more at places like Grocery Outlet, although I always did shop here quite a bit because they have good products and very reasonable prices," said Alex Babiansky.

While the Federal Reserve tries to calm the economy with another interest rate hike, when could inflation go down?

It is hard to tell, said UC Davis economics professor Kadee Russ.

The economists told CBS13 that the labor market, supply chain kinks and Russia's invasion of Ukraine are playing a role in the volatile market.

"The other big set of questions that we really don't know much about at all is what an economy looks like when it comes out of a pandemic," Russ said.

Meanwhile, shoppers say they are trying to stretch their budgets.

"I haven't gone into couponing — yet," Lewis said.