Groundwork’s Rakeen Mabud Reacts to December Inflation Report

January 12, 2023

Groundwork’s Rakeen Mabud Reacts to December Inflation Report

This morning’s Consumer Price Index (CPI) report shows inflation is at 6.5% year-over-year in December – down from 7.1% in November. While overall inflation fell from November thanks to falling energy and gasoline costs, the cost of essentials like housing and food remain elevated.

Groundwork’s Chief Economist Dr. Rakeen Mabud responded to today’s CPI report with the following statement:

“Today’s CPI report makes it crystal clear that we don’t need mass joblessness to bring down inflation. Chair Powell should stop further rate hikes before he engineers a totally unnecessary recession.”

“Further interest rate hikes will only weaken our economy, and the most vulnerable workers will be the ones to pay the biggest price.”

Email to speak to Rakeen Mabud about today’s CPI report, the last reading of inflation in 2022. 

What Experts are Saying About the Fed’s Approach to Inflation:

Diane Swonk | KPMG“We’ll have [a recession] because the Fed is trying to create one. When you say growth is going to stall out to zero and the unemployment rate is going to rise…it’s clear the Fed has got a recession in its forecast, but they won’t say it.” (12/23/22)

Bradford Delong | University of California-Berkeley“As of now, the principal risk is not that the Fed will do too little in the way of interest-rate increases to generate an economic soft landing, but that it has already done too much.” (12/20/22)

Susan Collins | Boston Fed President“I do worry that the presumption…that a recession is almost inevitable is not helpful because I truly do not see it that way…The costs of unemployment are very real for people, and that’s something I take seriously.” (12/13/22)

Paul Krugman | Nobel Prize-winning economist“I sometimes think of the Fed as trying to operate heavy machinery in a dark room — while wearing heavy mittens. So, even if we don’t need a severe recession to get inflation under control, we might get one anyway if the Fed brakes too hard.” (1/10/23)

Judy Shelton | Independent Institute“The Fed’s plan is to raise unemployment, and that’s how they would intend to fight inflation…But if it weren’t for all of those workers producing the goods and providing the services, inflation would be much worse. So I think that in spite of the Fed’s efforts to stymie that process, the economy is performing in a way that will help reduce inflation gradually.” (1/9/23)