John Catsimatidis, chairman and CEO of Red Apple Group, joins a Mornings with Maria panel to discuss the release of the April CPI report, the impact on the economy and the Federal Reserve’s possible response.
The CEO of New York grocery chain Gristedes is sounding the alarm about all the “stupid things” the government is doing amid persistent inflation.
When FOX Business host Maria Bartiromo asked John Catsimatidis when Americans will see a pause at the grocery store, he said, “When food managers are confident that Washington isn’t doing stupid things.”
“If they feel their earnings… will survive,” he continued.
INFLATION OVERVIEW IN APRIL: WHERE ARE PRICES RISING THE FASTEST?
His comments followed inflation rising 0.4% in April as prices remained stubbornly high. The Labor Department said on Wednesday that the consumer price index, a broad measure of the price of basic necessities including gasoline, groceries and rent, rose 4.9% on a yearly basis, slightly below the increase forecast by Refinitiv economists of 5%.
“Everyone is panicking at the moment,” emphasized Catsimatidis. “Bank managers are panicking and food managers are panicking. Everyone is panicking and wondering: what will fall next? Let’s take a break and see how things work out.”
Jerome Powell, Chairman of the US Federal Reserve (Photographer: Al Drago/Bloomberg via Getty Images / Getty Images)
Catsimatidis went on to say that corporate executives were “scared” and warned that if the Fed continues to hike rates, “1981 will start all over again.”
From July 1981 to November 1982, the so-called “Reagan recession” resulted in high interest rates to combat rising inflation.
“There will be no 2% interest rate anywhere anytime soon… and what we need to do is calm the markets and definitely not allow interest rates to go up. I’d rather they show they’re going to go down in the near future.” he said.
Inflation rose 0.4% in April as prices remained stubbornly high
The CEO emphasized that the traditional way of looking at inflation and interest rate hikes needs to be “modified”.
“The fact is we don’t want a bad economy. The American people don’t want a bad economy,” he said.
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During its May meeting, the Federal Reserve raised interest rates by 25 basis points to a range of 5% to 5.25%, the highest since August 2007, from almost zero just over a year ago. It was the tenth consecutive rate hike aimed at combating high inflation and slowing the economy. Policymakers also signaled that future rate hikes were not a given and indicated that further policy action would depend on “incoming information”.
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“The vicious cycle will continue unless someone in Washington is smart enough to say enough is enough,” Catsimatidis said.
Megan Henney of FOX Business contributed to this report.