RALEIGH, N.C. (WNCN) – Following the report Wednesday that the inflation rate reached 9.1 percent in June, economist Mike Walden said it could be the peak but that he also thinks a recession is more likely than not.  

“So, in some sense it’s trading one bad thing for another bad thing,” he said. “I now think that the odds of a recession happening is above 50 percent. I don’t see any reason why the Federal Reserve is going to stop raising interest rates.” 

Walden, a longtime economist at NC State, says the recent drop in gas prices likely will lead to a lower inflation rate when next month’s report comes out.  

The inflation news came the same day CNBC named North Carolina the top state in the country to do business for the first time.

“I do think if we do have a recession, North Carolina will be hit somewhat less severely than other areas because of our strong growth and because of the fact that if people lose jobs in other states, they’ll think about maybe coming to North Carolina,” said Walden. 

Gov. Roy Cooper (D) traveled to the White House on Wednesday as part of an event highlighting the American Rescue Plan, which Congress passed in early 2021. Critics of the $1.9 trillion stimulus package have pointed to it as one of the driving factors behind the rising inflation rate. 

U.S. Sen. Thom Tillis (R-NC) said Wednesday, “Instead of getting our economy back on track, President Biden and Democrats are pushing for more wasteful spending and tax hikes that will make inflation even worse and put our economy even deeper underwater.”  

During Wednesday’s summit, Gov. Cooper said the ARP funding has been critical in the state’s recovery from the pandemic and highlighted the state’s effort to use that money to help get people back to work. North Carolina is using more than $800 million in federal funding for child care programs.  

Cooper also noted that the state’s workforce and GDP returned to pre-pandemic levels in the middle of last year. 

“That American Rescue Plan has been strategic investments to make sure that people can live their lives and have a good job and get the training that they need,” Cooper said in an interview following the event. “Inflation is worldwide right now. We know that families are hurting.” 

Walden said he thinks it “made sense” for the government to inject more money into the economy going back to the start of the pandemic, but that there are “adverse impacts” especially when that happened amid supply chain issues.   

“I don’t like to characterize this as one administration’s problem or another. I think it was an aggregate issue, an aggregate downside of the fact that we were really blind about where this pandemic was going to take us,” he said.