- John Catsimatidis urged the Fed to halt its anti-inflation rate hikes
- Annual inflation fell again in April but remained elevated at 4.9%
- Fed policymakers are widely expected to suspend rate hikes at their June meeting
A billionaire grocer has said food prices will keep rising until Washington DC stops doing “stupid things” while urging the Federal Reserve to stop raising interest rates.
John Catsimatidis, talk radio host and CEO of Manhattan grocery chain Gristedes, made the following statement during an appearance on Fox Business this week.
This comes after the latest CPI data showed prices rose 4.9 percent year-on-year in April. That’s down from a peak of 9.1 percent last summer, but still well above the Fed’s 2 percent target.
When asked at the grocery store checkout when Americans would see relief from elevated inflation, Catsimatidis replied, “When grocery managers are confident that Washington isn’t doing stupid things.”
“Everyone is panicking at the moment,” said Catsimatidis. “Bank executives are panicking, and food executives are panicking.” Everyone is panicking and wondering, “What’s the next shoe that’s going to fall?” Let’s pause and see how the settle things.’
John Catsimatidis, talk radio host and CEO of Manhattan grocery chain Gristedes, has urged the Federal Reserve to halt its rate hikes. The latest CPI data showed prices rose 4.9% yoy in April
Catsimatidis has criticized the Fed for raising interest rates to fight inflation, claiming that if rates went up, “1981 would start all over again.”
In 1981, the economy went into a brief recession after the federal funds rate rose into the high teens to counter rising inflation.
Earlier this month, the Fed raised interest rates for the tenth consecutive month, a campaign that has lifted interest rates from near zero early last year to the current range of 5 to 5.25 percent.
However, Fed policymakers are widely expected to pause rate hikes at their next meeting in June, with markets pricing in an 85 percent chance of a pause from Saturday, according to the CME FedWatch Tool.
“We have to calm the markets and under no circumstances should interest rates rise,” said Catsimatidis. “I prefer it if they show that they will go under in the near future.”
Still, the billionaire grocery chain mogul expressed skepticism that inflation would fall back to the Fed’s target range any time soon, saying “there’s nowhere near a 2% rate anytime soon.”
However, he argued that the traditional method of fighting high inflation with higher borrowing costs cooling the economy needs to be “modified”.
In a file photo, a shopper walks through a grocery store in Washington, DC As inflation remains stubbornly high, grocery shoppers are still looking for relief from soaring prices
“The fact is, we don’t want a bad economy.” “The American people don’t want a bad economy,” he said.
“The vicious cycle will continue unless someone in Washington is smart enough to say enough is enough,” Catsimatidis said.
“The vicious cycle will continue unless someone in Washington is smart enough to say enough is enough,” he added.
Total food prices fell 0.2 percent mom in April but were still 7.1 percent higher than a year ago.
Prices for bacon, milk, citrus fruits and bacon fell at least 2 percent month-on-month in seasonally adjusted terms.
The latest statistics released by the US Department of Labor on Wednesday showed that the consumer price index rose 0.4 percent between March and April – four times the 0.1 percent increase between February and March.
The central bank has raised interest rates by 5 percentage points since March 2022. Fed Chair Jerome Powell has signaled the central bank may hold off further rate hikes as it assesses the impact of its past tightening
Meanwhile, the job market remains surprisingly strong despite the Fed’s tightening cycle: The economy added a solid 253,000 jobs last month and the unemployment rate hit a six-decade low at 3.4 percent.
A continued robust labor market could pave the way for the Fed to raise rates further, although this is not seen as likely.
Fed Chair Jerome Powell has signaled the central bank could hold off further rate hikes as it assesses the impact of its past tightening measures, as well as the impact of recent strains in the banking sector on lending and lending.
Since March, three US regional banks have failed, including the biggest banking meltdown since the 2008 recession.
As a result, nervous bankers have tightened lending standards and tightened credit conditions, which should help cool inflation.