The CEO of the supermarket chain calls for an end to the Fed’s interest rate hikes
An executive of a billionaire supermarket has said food prices will continue to rise until Washington DC stops doing “stupid things,” while calling on the Federal Reserve to halt rate hikes.
John Catsimatidis, a talk show radio host and CEO of the Manhattan grocery chain Gristedes, made the comments in an appearance on Fox business this week.
It came after the latest consumer price index data showed that prices rose 4.9 percent in April from a year ago, down from last summer’s peak of 9.1 percent but still well above average. 2 percent target from the Fed.
Asked when Americans would see relief from increased inflation at the supermarket checkout, Catsimatidis replied, “If the food managers are confident that Washington isn’t doing stupid things.”
“Everyone is panicking right now,” Catsimatidis said. “The bank managers are panicking and the food managers are panicking. Everyone is panicking and saying, what’s the next shoe that’s going to fall? Let’s take a break and see how things work out.”
John Catsimatidis, talk show host and CEO of the Manhattan supermarket chain Gristedes, has called on the Federal Reserve to halt its rate hikes.
The latest Consumer Price Index data shows that prices rose 4.9% in April from a year ago
Catsimatidis slammed the Fed for raising interest rates to fight inflation, claiming that if rates go up “you’ll get another year of 1981.”
In 1981, the economy entered a brief recession after the effective interest rate of federal funds rose to the top ten to combat skyrocketing inflation.
Earlier this month, the Fed raised rates for the 10th consecutive time, a campaign that pushed the policy rate from near zero to a current range of 5 to 5.25 percent early last year.
But Fed policymakers are widely expected to pause their rate hikes at their next meeting in June, with markets pricing in an 85 percent chance of a pause starting Saturday, according to the CME FedWatch Tool.
“What we need to do is to calm down the markets and there is absolutely no way rates should go up,” Catsimatidis said. “I’d rather they show they’re going down in the near future.”
Still, the billionaire supermarket chain magnate seemed skeptical that inflation would fall back to the Fed’s target range any time soon, saying that “there won’t be a 2% rate anywhere anytime soon.”
But he argued that the traditional method of tackling high inflation with higher borrowing costs cooling down the economy needed to be “changed.”
A customer walks through a grocery store in Washington, D.C. in a file photo. Grocers are still seeking relief from rapid price increases as inflation remains stubbornly high
‘The fact is that we don’t want a bad economy. The American people don’t want a bad economy,” he said.
“The vicious circle will continue unless someone in Washington is smart enough to say enough is enough,” Catsimatidis said.
“The vicious circle will continue unless someone in Washington is smart enough to say enough is enough,” he added.
Total food prices fell 0.2 percent in April from the previous month, but were still 7.1 percent higher than a year ago.
Prices for bacon, milk, citrus and bacon all fell by at least 2 percent month-on-month, on a seasonally adjusted basis.
The most recent statistics released by the U.S. Department of Labor on Wednesday show 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 key interest rates by 5 percentage points since March 2022
Fed Chair Jerome Powell has indicated that the central bank may pause further rate hikes as it assesses the impact of its previous tightening
Meanwhile, the job market remains surprisingly strong despite the Fed’s tightening cycle, with the economy adding 253,000 jobs last month and the unemployment rate at 3.4 percent, marking its lowest level in six decades.
A continued robust labor market could pave the way for the Fed to continue with further rate hikes, although that is not considered likely.
Fed Chair Jerome Powell has indicated that the central bank may pause further rate hikes as it assesses the impact of its previous tightening, as well as the effect of recent banking sector stress on lending and lending.
Since March, three regional banks in the US have failed, including the largest bank failure since the 2008 recession.
As a result, nervous bankers have cracked down on credit conditions and tightened credit conditions, which should help cool inflation.