Time for the Fed to Meet the FTC

Source: American Prospect
by Robert Kuttner

“The Prospect’s latest series on pricing power, which is the subject of our new issue, is a lesson in how the real economy works. You are invited to read it, and we also hope there’s another audience: the leaders of the Federal Reserve. The latest numbers on slowing economic growth and moderating inflation suggest that it’s truly time for the Fed to cut interest rates. The Personal Consumption Index, the Fed’s favorite indicator of inflation, rose just two-tenths of 1 percent in April, which translates to an annual rate of just 2.4 percent. Meanwhile, other key indicators show the economy slowing dramatically. … The Fed’s obsession with macroeconomic aggregates also fails to take into account one of the most important drivers of price hikes: concentrated corporate power in sectors ranging from drugs to health care to airfares to grocery prices.” (06/05/24)