Groundwork’s Dr. Rakeen Mabud on April CPI Report: “Rate cuts must come soon”

Groundwork’s Dr. Rakeen Mabud on April CPI Report: “Rate cuts must come soon”

In response to today’s Consumer Price Index report from the Bureau of Labor Statistics, which showed inflation at 3.4% in the past year, Groundwork Collaborative’s Chief Economist Dr. Rakeen Mabud reacted with the following statement:

“The Fed’s high interest rates fail to address the collusion and price gouging at the heart of today’s inflation and, in the case of housing costs, are actually making things worse.

“Rate cuts must come soon or else people are left to struggle with high interest rates that are only making life more unaffordable.”

Email press@groundworkcollaborative.org to speak with Dr. Mabud about inflation and the Federal Reserve. 

BACKGROUND

• High interest rates are bringing economic pain to lower-income Americans across the country. U.S. household debt has surged to an all-time high, and a recent New York Fed report found that early delinquencies on auto loans and credit card debt began rising for low-income borrowers in 2022 and now exceed pre-pandemic levels.
• Earlier this month, the Federal Trade Commission barred former Pioneer CEO Scott Sheffield from joining ExxonMobil’s board due to alleged collusion and price fixing in the oil and gas industry. High energy prices have been a major driver of inflation.
• Housing continues to be a major driver of higher prices. High mortgage rates put homeownership out of reach for prospective buyers, pushing them back into the rental market, which drives up rents. Rate hikes also make financing new housing construction more expensive, which means that builders don’t build as many new homes when we already have a housing shortage.
• From April to September 2023, corporate profits drove 53% of inflation. Comparatively, over the 40 years prior to the pandemic, profits drove just 11% of price growth.