Groundwork’s Rakeen Mabud Reacts to March CPI Report

Groundwork’s Rakeen Mabud Reacts to March CPI Report

Today, the Bureau of Labor Statistics released the March CPI report, which showed that prices rose 0.4% last month and 3.5% year-over-year, driven by higher shelter and gas costs. Groundwork’s Chief Economist Dr. Rakeen Mabud reacted with the following statement:

“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.”

Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about the state of inflation and the need for the Federal Reserve to cut interest rates. 

Background

• Groundwork found that from April to September 2023, corporate profits drove 53% of inflation. Comparatively, over the 40 years before the pandemic, profits drove just 11% of price growth. Corporate profits in Q4 2023 hit a record high of $2.8 trillion. High interest rates from the Fed fail to address this key cause of inflation.
• Mortgage rates at 20-year highs over the last two years are a significant barrier to prospective homeowners. This forces people back into the rental market, raising demand when there is already a housing shortage. The Federal Reserve is exacerbating this long-term affordability crisis and their high interest rates won’t lower these costs.
• High interest rates imperil the clean energy transition. Increased borrowing costs have slowed the growth of solar energy, delayed the production of electric vehicles, and prevented crucial offshore wind projects. Reducing reliance on volatile fossil fuels is crucial to lowering costs for families, and the Fed is standing in the way by not cutting interest rates.