Federal Reserve Chair Jerome Powell fielded questions for around 40 minutes on Wednesday following the central bank’s decision to impose another large interest rate hike, but not a single reporter asked about the extent to which record-high corporate profits are fueling inflation even as companies openly boast about their pricing power. Progressive economists have estimated that corporate profits are to blame for at least 40% of price increases during the recovery from the pandemic-induced downturn, a disproportionate contribution to the stubbornly high inflation that is eating away at workers’ wages. Some have put the number at over 50%. The notion…
Interest Rates
Federal Reserve Puts Burden of Curbing Inflation on Global Working Class
On Wednesday, at the end of a two-day Federal Open Market Committee (FOMC) meeting, Federal Reserve chair Jerome Powell announced a tightening of monetary policy in response to the highest U.S. inflation in 40 years. The burden of this measure will fall disproportionately on the working class, both in the U.S. and abroad. In a press release the FOMC said the current inflation rate reflected “supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.” The Fed raised its benchmark policy rate by 0.75 percentage points, the first increase of this magnitude since 1994. This…