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“While today's numbers are disappointing, they should not deter the Fed from their planned interest rate cuts. High interest rates won’t bring down the high housing and energy costs that are driving the affordability crisis for millions around the country.”
“While today’s numbers are disappointing they should not deter the Fed from their planned interest rate cuts," Rakeen Mabud, chief economist at Groundwork Collaborative, said in a statement. "High interest rates won't bring down the high housing and energy costs that are driving the affordability crisis for millions around the country."
Some economists questioned the idea that sticky inflation should spur the Fed to delay interest rate cuts. Lindsay Owens of the Groundwork Collaborative, a liberal think tank, said that some of the leading sources of inflation are largely immune to the Fed’s influence, since interest rates have little effect on the cost of car insurance or auto repair, for example. "None of these things are remotely in the realm of things that are impacted through demand destruction," Owens told The Washington Post. "I think if anything, this was not good news for those of us who want to see rate cuts sooner, but I think that’s unfortunate and misguided."
"While today's numbers are disappointing, they should not deter the Fed from their planned interest-rate cuts," Groundwork Collaborative chief economist Dr. Rakeen Mabud told Newsweek. "High interest rates won't bring down the high housing and energy costs that are driving the affordability crisis for millions around the country."
Still, Lindsay Owens, executive director of the Groundwork Collaborative, a left-leaning think tank, said there’s a disconnect between the parts of the economy that are driving inflation and the parts the Fed is trying to tame through high rates. For example, car insurance claims don’t go down if the Fed keeps rates high, Owens said. Energy costs are often tied to events around the world.
Many Americans say economic pressures — particularly inflation — are key to how they are thinking about this year's election. Consumer prices have remained high in the U.S., even though the job market has been quite stable. For groceries, for example, families are paying 25% more than they were before the pandemic.
On this edition, Joe and Kailey speak with: Groundwork Collaborative Executive Director Lindsay Owens following Friday's US Jobs report. United Nations World Food Programme Executive Director Cindy McCain about the program's work to deliver aid into Gaza.
According to an analysis from the Groundwork Collaborative, "corporate profits drove 53 percent of inflation during the second and third quarters of 2023 and more than one-third since the start of the pandemic." In the four decades prior to the pandemic, corporate profits contributed to just 11% of price increases.
"It's one thing for corporations to pass reasonable increased costs to consumers. It's another for them to line their coffers by exploiting Americans who are just trying to get by," the Groundwork Collaborative's Liz Pancotti said in January, as the group released a related report. "It's time to rein in corporate price gouging—or families will continue to pay the price."
Until the steadily rising costs of the essentials are addressed, the cost of living will keep ticking up for families in Minnesota and around the country, said Rakeen Mabud, chief economist at Groundwork Collaborative, an economic think tank.