Groundwork’s Michael Mitchell Reacts to November Inflation Report

December 13, 2022

Groundwork’s Michael Mitchell Reacts to November Inflation Report

This morning’s Consumer Price Index (CPI) report shows inflation is at 7.1% year-over-year in November – down from 7.7% in October. While overall prices are growing more slowly thanks to falling energy and gasoline costs, essentials like housing and food continue to keep inflation high.

Heading into the last FOMC meeting of the year, Groundwork’s Director of Policy and Research Michael Mitchell responded to today’s CPI report with the following statement:

“Today’s cooler-than-expected CPI report sends a clear message that Chair Powell should think twice before hiking up interest rates again.

“Chair Powell himself has admitted that we have yet to feel the full impact of interest rate hikes on our economy. Experts from Nobel Laureate economists to business leaders agree: adding more fuel to the fire risks throwing our economy into a painful recession.”

Email to speak to Michael Mitchell about today’s CPI report ahead of the Federal Reserve’s last meeting of 2022. 


Edouard Wemy | Clark University“The problem is, [raising interest rates by more than 75 basis points in December] would increase the chances of also pushing the U.S. economy into a recession – and it could be a pretty nasty recession…In short, people are not prepared for the recession that might be lurking around the corner.” [12/2/22]

Cathie Wood | Ark Invest“The yield curve is more inverted now than at any time since the early ’80s when double-digit inflation was entrenched…The bond market seems to be signaling that the Fed is making a serious mistake.” [12/7/22]

Scott Ladner | Horizon Investments“There’s only one way out of this (according to the Fed) and that is to continue to set policy to crush the demand side, but we haven’t seen any progress on that front yet. This makes a policy mistake from the Fed almost a certainty, if it wasn’t already.” [12/2/22]

Mark Zandi | Moody’s Analytics“I would not call it a ‘soft landing.’ It’s a complete mislabeling of the reality of what will happen here…If the economy is simply flat for jobs and GDP, which is the goal, that means half the economy is in recession.” [12/4/22]

Raphael Bostic | President of the Atlanta Federal Reserve“I do not think we should continue raising rates until the inflation level has gotten down to 2%…this would guarantee an overshoot and a deep recession.” [11/19/22]

Nicholas Colas | DataTrek[The New York Fed’s Recession Probability model] is clearly saying high short-term interest rates are going to cause a recession in the next 12 months. Moreover, these odds are very likely to increase…Chair Powell will almost certainly have to answer a question about the likelihood of a recession at his post-FOMC press conference next week. He might cite the NY Fed’s model and say ‘38 percent.’ But, based on the model’s history, the real answer is ‘close to 100 percent.” [12/7/22]

Paul Krugman | Nobel Prize-winning economist“None of this says that the Fed shouldn’t be trying to reduce inflation. But you shouldn’t invoke the plight of the poor as a reason for tight money. If anything, tight money, by leading to more slack in labor markets and therefore more unemployment, will disproportionately hurt lower-wage workers.” [11/29/22]

Ray Dalio | Bridgewater Associates“The Federal Reserve will put the short-term rate up towards that level [6%], which is very harmful, very damaging to the economy.” [12/7/22]

Ian Shepherdson | Pantheon Macroeconomics“[If the Fed keeps hiking interest rates aggressively into next year], we could then end up with an unemployment rate in 2024 or even late next year well above 5%, maybe getting up to six or something close to that.” [12/2/22]

Claudia Sahm | Former Fed Economist“We do not need to crush workers to get inflation down. We do not. Inflation is turning and unemployment is very low. The labor market, on most measures, is more robust and pro-worker than it was even before Covid. Good! We did not and do not need a recession. We do not need the Fed to cause one.” [12/2/22]

Joel Griffith | Heritage Foundation“The Fed is putting the blame on businesses that are just trying to survive in a poisonous economic environment that has been caused by the Fed itself.” [12/1/22]

David Solomon | Goldman Sachs“I think there’s a very reasonable possibility that we could have a recession of some kind…When I talk to most CEOs, they’re cautious about how they’re operating their business, they’re looking through the lens and saying ‘I don’t know.’” [12/7/22]

Alan Detmeister | UBS“It’s definitely time to slow the pace of rate hikes…If we see slowing inflation at this point, with those lags in monetary policy, you’re likely to see inflation slow down even more.” [11/10/22]

Liz Shuler | AFL-CIO“The Fed seems determined to raise interest rates, though it openly admits those rates could ruin our current economy as unemployment remains low and people are able to find jobs…the Fed’s actions will not address the underlying causes of inflation — the war in Ukraine, climate change’s effect on harvests and corporate profits, and an increase in the chances that the United States enters a recession.” [11/2/22]