Kitty Richards: “Today’s CPI numbers, as good as they are, are hiding an even better picture.”
Washington, D.C.. – Today’s Consumer Price Index (CPI) Report shows inflation came in at 0% month over month. This is the lowest inflation level we’ve seen since March 2021.
Groundwork’s Acting Executive Director Kitty Richards joined CNBC’s Squawk Box this morning to break down today’s numbers, arguing inflation is lower even than the headline number shows, the Fed’s interest rate hikes didn’t cause this decline, and high interest rates may be making life less affordable for workers and families:
“If you look at the path of inflation, we have rapid disinflation after a peak that was before the Fed’s interest rate hikes really got going. We’ve had that rapid disinflation in the context of a booming economy. Quarterly GDP growth last quarter in real terms was 4.9%, we’ve seen 21 straight months of unemployment below 4% – something many economists didn’t think would be possible.
“But even today’s CPI numbers, as good as they are, are hiding an even better picture, and that’s because of the role housing inflation plays in the way that we measure the CPI… It reflects prices for rent from about a year ago. If we look at market indices of rental inflation, it normalized year-over-year several months ago and in fact, peaked well before on a month-over-month basis.
“It’s really time for the Fed to ask, ‘Did we go too far?’ What real damage are high interest rates causing by making it more difficult for corporations to finance investment, by making it more difficult for us to move to green energy, by making it more difficult for people to actually afford homes and be able to make their credit card payments?”