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Businessman John Catsimatidis expects 10% to 14% food inflation by October.
Catsimatidis — the owner and CEO of Manhattan-based grocery chain Gristedes Foods — told Fox Business that Americans can expect higher prices for basic expenses in the coming months.
“We’re both in the food business, and we’re in the oil business. Food prices are getting higher, and we expect even more increases by October,” he said. “We’re seeing anywhere from 10% to 14% by October 1. It’s a real number.”
“And oil prices — I know they’re a little bit off today, but I expect even higher numbers,” Catsimatidis continued. “It’s a sine wave — everything just goes up and down. I expect by October you’re gonna have over a 6% annualized rate of inflation.”
When asked if businesses would pass higher costs to customers, he responded: “You have to pass it on, otherwise you’re not doing your duty to guard… your employees and your company.”
The most recent data from the Department of Labor shows that inflation reached a year-over-year rate of 5.4%. Core inflation — which factors out food and energy costs — has risen year-over-year by 4.5%. Inflation surpassed the predictions of economists surveyed by Dow Jones.
American consumers’ own forecasts for price levels have also hit all-time highs. Median one-year inflation expectations reached 4.8% in June — a 0.8% increase since the previous month. In January, February, March, April, and May, one-year expectations were 3.0%, 3.1%, 3.2%, 3.4%, and 4.0%, respectively.
During a speech on Monday, President Biden argued that inflation is temporary in nature:
We also know that as our economy has come roaring back, we’ve seen some price increases. Some folks have raised worries that this could be a sign of persistent inflation. But that’s not our view. Our experts believe and the data shows that most of the price increases we’ve seen are — were expected and expected to be temporary.
The reality is, you can’t flip the global economic light back on and not expect this to happen. As demand returns, there’s going to be global supply chain challenges. We’ve seen that in semi-conductors, which are used in automobiles. That global shortage has slowed vehicle production, creating a temporary spike in car prices. That’s a real challenge. And my administration is doing everything we can to address it. But again, these disruptions are temporary.
Now, I want to be clear: My administration understands that if we were to ever experience unchecked inflation over the long term that would pose real challenges to our economy. So while we’re confident that isn’t what we are seeing today, we’re going to remain vigilant about any response that is needed.
Despite rising inflation, the Federal Reserve — which controls monetary policy in the United States — has not yet laid out a plan to taper its aggressive stimulus measures. Currently, the central bank is buying $120 billion in bonds from the private market in order to pump liquidity into the American economy.
The federal funds rate — which the Fed attempts to decrease in order to encourage economic activity — presently ranges between 0% and 0.25%.