The SF Fed denied the claims of the Biden Administration, Democratic lawmakers, and other Americans that corporate greed is worsening inflation in the US. The Federal Reserve Bank of San Francisco stated that the corporate greed inflation theory they believe in isn't true. Here's why.
SF Fed Denies Biden Admin's Corporate Greedflation Theory
Fox Business reported that Joe Biden and other Americans usually blame corporate price gouging for the worsening economic inflation, which is forcing the country to pay more for daily necessities.
However, the SF Fed clarified that the inflation, which began in early 2021, isn't mainly driven by corporate greed. There's no denying that prices drastically increased after the COVID-19 pandemic, such as the markup surges for gasoline and vehicles.
However, the San Francisco Federal Reserve Bank discovered that the overall price increase rate remained flat and consistent with previous economic recoveries during the past three decades.
"These patterns suggest that markup fluctuations have not been a main driver of the ups and downs of inflation during the post-pandemic recovery," the federal bank's weekly Economic Letter explained.
Why Biden Admin Blames Corporate Greed
Via CNN Business, AGF Investments Chief Policy Strategist Greg Valliere said that the Biden Administration is desperate to blame something or someone for the inflation.
He said that blaming corporate greed is just looking for scapegoats. Greg added that there are no prescriptions that would quickly have a major effect on economic inflation.
Instead, the investment strategist said that the inflation is caused by the Federal Reserve, which reluctantly increases interest rates across the country.
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