The CEO of New York City grocery store chain Gristedes is sounding the alarm over all the “dumb things” the government is doing as inflation persists.
When FOX Business host Maria Bartiromo asked John Catsimatidis when Americans will see a break at the supermarket he said: “When the food executives feel confident that Washington is not doing dumb things.”
“When they feel that their earnings… are going to survive,” he continued.
His comments came on the heels of inflation jumping 0.4% in April as prices remain stubbornly high. The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, climbed 4.9% on an annual basis, slightly below the 5% increase forecast by Refinitiv economists.
“Right now everybody’s panicked,” Catsimatidis stressed. “The bank execautives are panicked and food executives are panicked. Everybody’s panicked and say, what’s the next shoe that’s going to fall? Let’s take a pause and let’s see how things sort themselves out.”
Catsimatidis went on to say corporate executives are “scared” and warned if the Fed keeps raising interest rates “you’re going to have a 1981 all over again.”
From July 1981 until November 1982, the so-called “Reagan recession” resulted in high interest rates in an effort to fight mounting inflation.
“There’s not going to be a 2% rate anywhere soon… and what we have to do is calm the markets and the rates have to definitely not go up. I prefer that they show that they are going to go down in the near future,” he said.
The CEO stressed that the traditional way of looking at inflation and raising interest rates needs to be “modified.”
“The fact is that we don’t want a bad economy. The American people don’t want a bad economy,” he said.
During its May meeting, the Federal Reserve raised the fed funds rate by 25 basis points to a range of 5%-5.25%, the highest since August 2007, from near zero a little more than one year ago. It marked the 10th consecutive rate increase aimed at combating high inflation and slowing the economy. Policymakers also signaled that future rate increases are not a given, suggesting that additional policy moves will hinge on “incoming information.”
“The vicious circle is going to continue unless somebody is smart enough in Washington to say enough is enough,” Catsimatidis said.