The new analysis came shortly after the Bureau of Labor Statistics
released data showing that the consumer price index rose 4% in May compared to the previous year, the smallest increase since 2021.
Further evidence of cooling inflation sparked a fresh round of calls for the Federal Reserve to stop hiking interest rates before it pushes the economy into recession. The Fed is
widely expected to announce Wednesday that it is pausing rate increases for the month of June, but it could resume the hikes as soon as the following month.
"The Fed should not only pause tomorrow but pause going forward and see how these 10 rate hikes play out," Rakeen Mabud, chief economist at the
Groundwork Collaborative, said in an
appearance on
Yahoo FinanceTuesday morning.
Liz Zelnick, director of economic security and corporate power at Accountable.US, said in a statement that "after an unprecedented 10 interest rate hikes in a row, it's clear the corporate profiteering epidemic will persist no matter how many times the Fed doubles down."
The New York Timesreported late last month that even as the prices of key raw materials have fallen in recent months, "many big businesses have continued raising prices at a rapid clip" and signaled that "they do not plan to change course"—which helps explain
data showing that U.S. corporate profits rose to a record level in the first quarter of 2023.
"PepsiCo has become a prime
example of how large corporations have countered increased costs, and then some," the
Times noted. "Hugh Johnston, the company's chief financial officer, said in February that PepsiCo had raised its prices by enough to buffer further cost pressures in 2023. At the end of April, the company reported that it had raised the average price across its snacks and beverages by 16% in the first three months of the year. That added to a similar price increase in the fourth quarter of 2022 and increased its profit margin."
Zelnick said Tuesday that "higher interest rates haven't stopped S&P companies, especially in the Big Food industry, from inflating consumer prices despite reporting billions in extra net earnings and over a trillion dollars in giveaways to wealthy investors."
"Corporate greed is a stubborn thing and requires serious action from Congress," she added. "The Fed has not seen an adequate return on its investment in a policy that has already created fissures in the economy that could lead to recession. It's just not worth it."
(full article online)
"After an unprecedented 10 interest rate hikes in a row, it's clear the corporate profiteering epidemic will persist no matter how many times the Fed doubles down," said Liz Zelnick of Accountable.US.
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