oil and gas company profits and to funnel the proceeds to financially struggling households. Inflation sparks worldwide protests as food, fuel prices soar Yet for all the public’s resentment, most economists say corporate price gouging is, at most, one of many causes of runaway inflation — and not the primary one.“There are much more plausible candidates for what’s going on,” said Jose Azar an economist at Spain’s University of Navarra.They include: Robust spending by consumers.
Supply disruptions at factories, ports and freight yards. Worker shortages. President Joe Biden’s enormous pandemic aid program.
COVID 19-caused shutdowns in China. Russia’s invasion of Ukraine. And, not least, a Federal Reserve that kept interest rates ultra-low longer than experts say it should have.The blame game is, if anything, intensifying after the U.S.
government reported that inflation hit 8.6 per cent in May from a year earlier, the biggest price spike since 1981.To fight inflation, the Fed is now belatedly tightening credit aggressively.On June 15, it raised its benchmark short-term rate by three-quarters of a point — its largest hike since 1994 — and signaled that more large rate hikes are coming.