Prices are high and they're going higher. In June, the Labor Department reported that a key inflation measure, the Consumer Price Index, had increased by 8.6 percent year-over-year – the largest 12-month increase in 40 years. New numbers will be out this week – and they are expected to stay high.

In response to this inflation, and in order to stabilize it, the Federal Reserve raised its benchmark interest rate by three quarters of a percentage point in mid-June – the biggest hike since 1994. And the Fed has indicated that additional rate hikes are expected in the coming months. 

While these higher rates are supposed to “cool” the economy down, some economists worry that this could hurt the job market, cause higher unemployment, and potentially trigger a recession.

To hear more about what's going on with the economy we spoke with Damon Jones, economist and professor at University of Chicago.