 If you're just joining, you're listening to a ProPublica Roundtable on Inflation. My name is Conor Goodwin, and I'm an event associate with ProPublica. For those new to us, ProPublica is a nonprofit newsroom dedicated to investigative journalism. Inflation is the top concern for most Americans today. And at this event, we will unpack the current economic situation, examine the root causes of inflation, assess the Federal Reserve's response to price increases, and forecast possible outcomes for the economy. We'll also answer your questions. To ask a question at any point, click the Q&A icon at the bottom of your screen and type it there. Also, you can enable subtitles by clicking on the closed captioning icon at the bottom of your Zoom screen. And now, allow me to introduce our speakers. Claudia Saum is a well-known, highly regarded Washington-based expert on monetary and fiscal policy and forecasting. She has several years of experience advising decision makers at the Federal Reserve, White House, and Congress. Rakhine Maboud is the chief economist and managing director of policy and research at the Groundwork Collaborative. Michael Graybell writes about economic issues, labor, and trade for ProPublica. His most recent story focused on hidden fees in the ocean shipping industry, and he's the author of a book on President Obama's economic recovery efforts after the 2007 recession. And our moderator today is Nora Ali. Nora is the CEO and co-founder of an upcoming media venture and host of the Business Casual podcast from Morning Brew. I'll let Nora take it from here. All right. Thank you, Connor, and thanks everyone for attending. I'm so excited to be joined by this panel of experts. I think this is the first time in my recent memory that everyone's talking about inflation, not just economists. In fact, I was listening to a dating podcast episode, and the title of the episode was, Is it inflation or is he just not that into me? So we're all talking about it. So I'm excited to learn more about what's actually causing inflation right now. So Claudia, we'll start with you. This is the hot lead debated topic. Is it fiscal policy, monetary policy, the war in Ukraine, the pandemic, greedy corporations, probably some combination of all of these things. But from your expert economist perspective, what factors are considered to be the main driving forces behind inflation generally? And who is getting hit the hardest right now? Right. So there are many causes, right? We have a really complicated situation and that obviously is going to be a complicated set of factors. All that said, the root of all evil with inflation and a lot of the other disruptions that we have lived through in the past two and a half years goes back to COVID. Right. And so I know there's a lot of focus on inflation, but rewind a year ago and we had millions of people without jobs that was also related to COVID. The event we shut down a $25 trillion economy in March of 2020 to keep people safe. I'm not disputing that the global economy largely shut down. So think of when you, it's a lot easier to shut something down, like your computer. It's a lot harder to get it booted up like it takes more time, particularly if it's an old computer that you haven't paid any attention to like actually investing money. And so what we have lived through is a very messy reopening. And the where we're at right now is with inflation. Now there's a lot of other contributors, things, you know, putting pumping extra money into the economy through the rescue plan. And really, it's a good thing people had money, you know, the labor market coming back so strong, actually also put a lot of demand in that's another tricky one has a lot of good but it did contribute to inflation. And then Vladimir Putin tried really hard and maybe did take the front runner for the root of all evil and inflation this year and that is absolutely a big piece of the run up and gas prices. In March when we hit $5 recently, that was $1.50 increase in gas prices so there's a lot of problems there's no one single bullet and different economists experts would rank them differently. But at the end of the day we would not be in this mess. If a global pandemic had not come down upon us. That makes sense Claudia, I do want to focus in on a couple of the factors that you mentioned and turn it over to Rakeen on this Rakeen. To what extent do you think things like increasing worker wages or these investments is pumping of extra money that Claudia mentioned like the American rescue plan. To what extent do you think those are at the root of our current inflation problem. Yeah my short answer is no. I mean I think we really ought to build a system and have a system where we can deal with fluctuations in man right that we can a system that can handle a shock whether that's a global pandemic or increases and decreases in the end. And, you know, the sort of short answer on worker wages and $1200 stimulus checks is that they're not the main drivers of inflation right now, you know, policies like the ARP were essential lifelines for millions of people around the country. That would be the reason why we're actually in the midst of a historic recovery of a strong resilient economy right. So giving people the resources to keep their lights on to put food on the table to take care of their children. That's void our economy in during a period of immense crisis right and we know what the alternative is because we saw it in the wake of the crisis and we have had a jobless recovery with sluggish growth. And we're on a better path, precisely because we have centered people in these investments. And, you know, I think it's also important to note I think workers are often scapegoated in this inflation conversation, but inflation workers have been facing rock bottom wages for decades right I mean worker wages are abysmal in this country, and the climate unionization has harmed workers access to economic mobility for a really, really long time. So the fact that we're seeing rising wages from a very, very low baseline in the midst of a crisis is actually an incredible testament to the importance of investments like those in the ARP. And so the real culprits in my view really take advantage of many of the factors that Claudia laid out at the top of this conversation. And, you know, I want to name specifically the culprit that grammar collaborative has really focused on which is mega corporations who were really perfectly positioned by virtue of their market power to take advantage of this period of shocks you know so my team at groundwork has combed through hundreds of earnings calls, which are the calls where CEOs tell their investors kind of what the pass quarters performance was like and what the future outlook is an sector after sector and company after company what we see is CEOs are saying the quiet part out loud. They are celebrating their ability to raise prices to provide. Currently, I mean we're seeing 70 year record highs and corporate profit margins, provide huge payouts to their shareholders. It's not wage increases that are holding them back and they're saying like look, inflation is giving us cover to do this to sort of put it right to go back in front of their spoonful. And the last thing I'll say is, it's not just the earnings calls which I think are really rich data set, but quality of data also backs this up so there's recent research from the Economic Policy Institute, they found that as of q1 of 2022 corporate profits are much much bigger chunk of the recent rise in prices than wages, or input costs right so about 54% of the price increases are due to corporate profits input costs and we just comprise about 38% and we just comprise less than 8%. So, you know, this is a complicated story but workers are certainly not to blame and neither are the down payment and investments that we started to make in the ARP which are critically important to getting us to where we are today. So we're seeing where, like you said inflation is a cover where corporations can say, oh we're raising prices because of inflation but they're raising it to a higher extent than, than even where inflation is. So speaking of people taking advantage, Michael, you have this incredible investigative report on ProPublica called the hidden fees making your bananas and everything else costs more, where ocean carriers might actually be taking advantage of the of your findings in terms of inflation with these ocean carriers. Yeah, I, so I took a look at this a slice of this problem which is the supply chain, and there's a lot of people have in the Q&A but we asked beforehand asked sort of, what is the breakdown of what caught what is causing it and there are different problems. There's one from the Federal Reserve and Contemporary Disco that estimated that supply problems were currently half of the problems that we were seeing versus, you know, a third being demand. And so, but, you know, like Paulie said this all kind of started with, with COVID. The problems we had both in the increased demand that people had, that people had from the savings from shifting the spending from services to goods and, you know, couches and things to make living staying at home more pleasant. And at the same time, you know the increase in money in both the Trump administration, the Biden administration's stimulus checks that kicking in. But at the same time we also had these dramatic supply shocks where places were shut down, people couldn't come to work because they were quarantined. And that really kind of gummed up the works a bit and we haven't, even though we've seen some moderation with the supply chain, since, since the holiday season, it really hasn't, we haven't really gotten a break because immediately after the holiday season we had the war in Ukraine that caused problems with energy and gas, sorry, energy and food prices. And right after that we had the shutdowns in Shanghai which which created a different problem for the supply chain. So the Biden administration has really focused a lot on some of the basic numbers that the cost to ship a container from Asia to the West Coast went from less than $2,000 before the pandemic to $20,000 in September of last year. And, you know, that's a huge increase in what we pay and gets added on to the price of our products. And the ocean shipping industry currently in recent months has been experiencing a 57% profit margin, which is much higher than they've ever experienced before. And so the, the, the slice of this I looked at were these hidden fees that are known as detention and demerge. And it sounds really complicated these are things that even the people in corporate boardrooms hadn't heard of until late last year, but they start significantly impacting the prices that it costs to bring goods in. And what these essentially are they're late fee and normally they're essentially late fees and normal time is to make a lot of sense. Importers who don't pick up their stuff on time, get charged to merge for storage of marine terminals, truckers who don't return an empty container on time pay late fees, and that's not a detention. And the purpose of the penalties is to is to incentivize the various players in the supply chain to keep the goods flowing. And what the problem is with this with the congestion that we were seeing. There was no amount of fine or fee that was going to get these containers back to the ports or get picked up on time and ocean carriers decided that they were going to, even though they were making it extremely difficult to return these containers or to, or to allow companies to pick up the containers, they were going to charge late fees anyway. And so these things added up to where a container that might have cost, you know, $6,000 or a few thousand dollars is now costing like 40 to $60,000 per, you know, to bring something over. And the example I use was, you know, this the shipment of 600,000 pounds of bananas, which normally cost 60 cents per pound. And when the proposed fee was added in, it would have added another 30 cents on top of that just that this detention to merge fee alone, not including the increased costs of bringing it over from Central America, not including the cost of trucking, not including any sort of profit. This detention to merge fee was adding up to that much half of the cost of what bananas were selling for in the grocery store. And I do want to sort of think about this larger idea of why does the, the cause of inflation actually matter to us and what the scale of the problem is so Michael very quickly as the follow up. 90% of the stuff Americans buy from overseas arise by ship, and nearly all of it is carried by a number of ocean carriers, a small number of ocean carriers that work together in three alliances that dominate the trade. Can you just contextualize the scale at which this impacts consumers at the end of the day. Yeah, just like you said 90% of the stuff we buy from overseas and we buy a lot of stuff from overseas. And those, you know, so, so this this in the past right this was a invisible cost to us that we didn't have to pay attention to, because it was so cheap. The fact that it costs less than $2,000 to move something, a container full of 40,000 pounds of goods from Asia to the US costs so little is what makes it possible for us to move manufacturing to all those other countries and to to to have extremely low prices. Those come with other costs on the back end that that we don't realize. But in this, you know, in this situation, when there was a problem where the fees went from $2,000 to $20,000 were detention and murder fees that nobody really ever paid attention to were suddenly eight to $20,000. All of a sudden our prices for everything that we bought was going up. So corporations and these carriers taking advantage of the situation now it, you know reminds me of what Claudia had said is the root of all evil is COVID, but it's not like our supply chains were built during coven some of these issues, likely existed pre pandemic so we're keen. What does this high inflation now tell us about the problems perhaps in our supply chain and the economy even before the pandemic. That's a really important question I think Michael really teed it up beautifully, you know, inflation today is a symptom it's not necessarily the disease right and as Michael was just referring to companies have are taking advantage of this moment to add on extra fees or raise and they're doing that precisely because you know they had a deal with the American consumer, the deal was, we're going to build a supply chain that is extremely brittle that's a just in time supply chain, where we're going to cut away every single failsafe that exists in the system in order for us to maximize short term profits. What you get as a consumer is cheap goods and goods delivered on time right, but as soon as there's any shocked that system whether that's a pandemic, whether that's a shift in demand. Whether that's a factor on the other side of the world shutting down because of a COVID outbreak, that deal breaks apart and that's exactly what we saw me to Claudius point, the pandemic was really a catalyst that exposed a lot of what had been gone, you know, wrong in the way that we built the system, a really fragile system in the first place. And when I say we what I really mean is the way mega corporations and built the system that that benefited themselves right. And, you know, I often talk about how in this moment what we have is a is a perfect confluence of means motive and opportunity. You know, these big companies, these, you know, to the ocean shipping example, three alliances that that dominate the ocean shipping industry like by far have market power right they had market power to build a system that work for them, they had market power to exercise, you know, to jack up prices above what their input cost would justify. We've always seen that companies have had a profit motive that's not new. No one's saying that's new, but that is interacting in an important way with that means, and they have opportunity now right they have the cover of inflation consumers don't know how much of the increase of the prices that they're seeing is because of the cost versus, you know, gilding that Lily a little bit and I think the ocean shipping example is just such a good one because it shows how endemic concentration and consolidation has made our economy right for profiteering. You know, with these three big alliances. It's on accident and it's a set of policy choices that we made in the 1980s and 1990s to deregulate the industry and allow for this oligopoly of ocean carriers to build power and consolidate. And at the end of the day what it means is that these companies can keep costs low for themselves and reap profits without being any with any risk of being undercut at competition, and it comes at the expense of stability and reliability for consumers. And so, you know in Q1 and this is our points I'm just reiterating reiterating what Michael already said but you know the result is that in Q1 of 2022 the global shipping oligopoly are in a record breaking $59.3 billion in profits and they're expected to make even four times that this year I mean that's a ridiculous amount of profits and a significant share of that is just them, you know, jacking up prices you know they've increased freight shipping rates from the US to Asia by over 1000% over the course of the pandemic that is not a normal thing that's not market forces at work that's simply these big companies exercising their market power to take advantage of the situation. I want to stay on that for a second Rikin because we've seen some of the shortcomings when it comes to regulation around mega corporations very publicly we've seen hearings for tech companies for example where lawmakers might not actually know what the right regulation is to prevent these oligopolies or monopoly situations. So whose responsibility is it to hold these mega corporations accountable such that they don't charge consumers more than they have to. So there are a range of tools in our toolbox right then we should be using to address this issue. You know, 3435 states I believe have price gouging statutes, we could have a federal price gouging statute, we could start taxing corporations better that might mean a windfall profits tax that could also just mean more aggressive corporate taxation. We could empower the DOJ and the FTC to important bodies with regulatory power and enforcement power to actually enforce and regulate these big companies so we don't it's not that we have a dearth of solutions that are disposal it's that we're not using them right, and I think that's that at the end of the day is what I think we're going to get to a little bit later and how do we talk about how do we actually address this the root issue causes of this problem today. And we're the sort of policy discourse is focusing on a very specific blunt tool that addresses demand, but given the supply side and supply chain issues that are driving many of these high prices I think we really need to think more creatively about the types of policy changes that we need to make to address this issue. All right, we will get to more solutions in a few minutes but Claudia I didn't want to turn to one question that we got that's related in the Q amp a, because Rakeen and Michael we're talking about some of the issues in the supply chain ecosystem that were in issue before the pandemic so the question from Leslie here is, is there anything that could have been done to limit the severity of inflation at the outset of the pandemic. I'll answer that one thing I wanted to add on to when we're talking about these supply chains is right now, this is a big problem for a lot of reasons that were just discussed. But since the 1990s durable goods many which have come through these supply chains produced in Asia and other parts, they have fallen in a like quality adjusted way so we have enjoyed years and years from this system. Now I'm not saying that means the system is good and we should like keep going, but we need to like step back and understand. I think for me one of the painful things of this crisis, there are many, but we're thinking about inflation is understanding exactly how we had gotten all those really low prices. Like we have gotten these low prices on the backs of workers in Asia, people who get very low pay in the United States, you know, these systems that are just put together with shoestring and bubble gum right like so I think this is one where we do have to be honest about like fixing these systems may come with a cost but a but you would have benefit will be a more resilient and more equitable system but I think this is you know kind of opening up that discussion. In terms of, okay, so you know we talked a lot about this, you know supply chains and the government or whatever businesses contributed a lot to this problem. Early on in the, in the pandemic and it's not blaming them necessarily is they like, many of the rest of us had really no idea what was going to happen next. And so in when COVID started the economy shut down demand disappeared a lot of businesses like weren't ordering goods, but they weren't they weren't expecting consumers to come back as quickly. It turned out that consumers came back a lot more quickly than did the goods and you know the same with the workers. And so there were mistakes made mistakes. There were misjudgements that caused a lot of the tension because we really did have this big shift in demand from services to goods and you know we'd waited on things and so that it all came at once. It really did put a lot of pressure on the system. Some of it was, you know, honest mistakes and some were probably more using the crisis to do things that were less fair to consumers and the rest of us. But I think the problem with the crisis has been that none of us have had a crystal ball, the best efforts of policymakers businesses, people to try and figure out what comes next like this was just so far out of the playbook. And, and so that meant it was, it was a really big problem that we had so many fragile systems, I mean supply chains are just the start of the list, right COVID really preyed on a lot of the structural problems that we had so it was a little bit of like dominoes continuing to fall. So, oh, I would the one thing we could have done early in the pandemic is really get on COVID in terms of vaccinations and the public health like politicizing that came with a lot of costs human costs but also it's made the disruptions harder. Absolutely Claudia sticking with you I want to talk about oil now so the White House has pointed the finger at oil companies for high profits as you know part of this conversation we're having around mega corporations. The US oil industry has responded that they don't actually have the ability to increase drilling, or even refinery capacity or doing everything they can or so they say, how true is that. And do you think there is anything the oil industry can do. I think there's, I think there is a lot of truth to what they're saying, though, you know with the caveats. One thing to remember is in 2020 oil prices, like in mark went like to zero, and in some cases and like the futures markets to negative. Now we had really cheap gas in 2020 a lot of people weren't driving to work, we were panicked about other things, but the administration the Trump administration did not step in. And this was widespread I'm not you know pointing fingers here there were other crises but like nobody when gas is really cheap and we do have it cycle like every five or six years we've had these kind of cycles. Nobody steps in and says, Oh, it's really low we need to like save these companies and and it got low enough again the oil prices were extremely low demand for gas for the first time in forever really dropped off. There were companies particularly refineries you hear of that were really old and had not been invested in they just, they just shut down. Right or you know it just and so that means that again them restarting is very difficult I know there's been a lot of discussion about the exceptional profits that oil and gas is making this year. But again they've had this like feast and famine, no shareholder, and the shareholder economy is what we got you got to deal with this, but no shareholder is going to say well just because this year is profitable. Let's go and you know invest and drill, because next year might like these prices are probably temporarily high, and then, you know, there's not necessarily much of a future in oil and gas so this is one where to. I mean in gas prices double since the start of in the past. Since the beginning of cove a gas prices have double that is an incredible hardship for families. And but at the end of the day you get gas prices down when you get oil prices down. You know, you either raise supply or you reduce demand and doing taxes on exceptional profits right now that can be one way to, you know, take some of that money and redistribute it to people who are paying those high prices, but that still does not fix this problem with energy and it will come again maybe not this severely but like we've had these cycles. So let's just jump in here and add something to what Claudia was saying, I mean I think that's exactly right there's incredible volatility in the global oil market, and therefore what people experience when they try to drive their kids to work. And the only way out of that is to detach like detach ourselves from from being tethered to the global oil market right so you know to the question that the audience member had about what could we have done before the pandemic I mean my answer to that is like, we should have invested in better systems to begin with and I think this is another case where investing in clean green energy is the best way to get ourselves away from that boom and bust cycle of, you know commodity markets to have a better and healthier planet and to have more stable prices. I would throw that out there too because I think often these conversations get very stuck in the here and now and, as we've been talking about these are long running deep seated deep rooted problems that we have to think really big about right and big investments are one really really critical tool that we have to build a system that is resilient and that does function and protects us from these types of shocks in the future. I mean, there's this and to your point Claudia there's this portfolio of actions that should be taken can be taken could have been taken. But Michael going back to, you know some of these potential solutions and the question I asked for keen around regulation and the authorities. What actions do you think regulatory authorities should take at this time, given that it's it already feels like it's a little bit too late in some cases but what do you think should be the immediate actions right now from those regulators. Yeah, you're right there's very little that you can do on the short term from regulatory standpoint, even if they were to correct on in every monopoly, it would take a long time and these would be tough legal cases. In terms of ocean shipping, there has been some action from the Federal Maritime Commission, trying to send the signal that charging fees that serve no purpose. It shouldn't be allowed. And, you know so they did propose they try to propose a $16 million fine on on one ocean carrier named Hapag Lloyd. And ultimately the case was for $2 million seems like a lot but when you actually break it down it was about the profits that Hapag had made in 98 minutes last year. So so not quite, you know, maybe not quite a signal as large a signal as could be needed well to see. I did want to go back to so something that Claudia had had talked about and putting what we're seeing with inflation into context. I don't mean to be upset about increased prices, but we do have to ask the question about, you know what they were seeing is inflation or a correction of artificially low prices that we've been used to paying. And I think, you know the example that I've been using for this is, you know in recent weeks the business community has been up in arms about a law called the weaker force Labor Prevention Act, which was what Congress passed to sort of take action on the mass movement and of Uighurs to go to work and reeducation camps. And, you know that may raise prices they try to re figure out the supply can ensure that nothing is coming from this region, but nobody expected the stuff that we were buying before this was made with forced labor. And that that's not that shouldn't be the norm right. And if retailers have been required to put a big sign on the products they were selling saying made this may have been made with forced labor, like a cigarette package, people wouldn't have bought them. So the real price shouldn't be the one that that is made with oppression that's not the normal free labor market that that we expect when we talk about free markets. In the same case with oil prices. There's been a number of studies over the years that have estimated that the real price of a gallon of gas is multiple times what we pay at the pump when you factor in cost of wars and climate change. That's not something that we see at the, when we pay for gas usually. So I think it is an important perspective to keep in mind when we have this discussion about what for it right now is a short term inflation six months period. Yeah, that that's really important context. Thank you, Michael. So shockingly we haven't even really talked about the Fed yet. So let's turn to that. Obviously, Jerome Powell and the Federal Reserve have a host of tools that they used during the pandemic that contributed to this level of inflation that we're at now but I guess we're keen starting with you. What is the most appropriate thing for the Fed to use right now the most appropriate tools right now to try to combat inflation. Let me be contrarian and say, I don't think the Fed is the solution here. So the Fed is pretty aggressively raising interest rates and signaling additional rate heights. And there's a real risk that the Fed could, could act too aggressively I mean I think that's, that's something that we're really keeping an eye on and we hear this from economists like Larry Summers right who have said was been very public about the fact that we need to aggressively raise rates, according to him, not to me to crush wage growth and raise unemployment rate aggressively to tamp down inflation. But this remedy for inflation is just worse than a disease right artificially creating a recession will put millions of people out of work, especially black and brown workers, black workers, even in a so called good healthy labor market face double the unemployment rate of white workers like imagine what that looks like. When you are forcing a country into a recession. And I think, you know, the idea that the Fed is the sort of savior of the Messiah for for inflation reflects a fundamental misunderstanding of why we have rising prices in the first place. The primary issue here is not demand right we should we should have a system that can handle demand. It's broken supply chains, it's unbridled corporate corporate power it's pandemic profiteering. And so constraining demand by making people poorer, which is exactly what raising interest rates will do is flawed and dangerous and will you know really puts puts at risk the health of our economy both now but also in the long term. So, you know, I would say that the only thing worse than high inflation is high inflation and high unemployment. And if you want to raise rates aggressively or put this problem entirely in the hands of the Fed that's actually where I think we're going to end up. Adia, do you agree that we don't need an artificial or forced recession we don't need to make people poor do you agree with that what Ricky said. We don't need a recession the Federal Reserve would agree with that. Right like this is not they are not trying to cause a recession they're trying to get inflation down. They're very clear they're going to keep going until they get inflation down. It frustrates me to know and are the comments from the administration and from Congress that the feds got this right it's kind of let's let's pass the football, and you're going to take care of inflation. And frankly, that is factually incorrect. The Federal Reserve can do nothing to get gas and food prices down. I have not read a single article about inflation where they talked to real people not just economists and every single one mentions gas or food. So to me, and you know I push hard on the administration to do more, but frankly Congress is the one that has got a whole set of tools, and they are doing nothing and no one. Frankly, I don't think enough people are pointing a finger at them to say get going. You know, I just, it's because the, the Fed has one tool, it can move interest rates around. Right, that that's it that is not a, it's not a strong tool. It's not a well targeted like it's not going to deal with the shipping containers versus the gas company it just, it pushes everything. Maybe particularly in the housing market but in general it just, and they can't. It's not like it has a dial, and you can fine tune it. Congress or the administration can do policies that are very targeted to the places where inflation is the worst. We do not have a lump of inflation, we have different sectors and prices. I think the Fed is committed to do the best they can. The Fed is disagrees fundamentally with the idea that we have to have a severe recession to get inflation down, but they could overdo it. Right, like that's, that's entire and that risk is higher and higher, the more that they have to go it alone. So if not so the Fed is not the secret sauce the Fed is not the solution so it sounds like Congress can act corporations can act more regulation generally I do want to actually read another question from the q amp a, which is related and I'll toss this question to you. This person said I'm nodding furiously in response to artificial prices and corrections in the market I feel like companies hide behind inflation and rising prices. In response to any shock to the market as an opportunity to make a quick buck. How do we get out of the cycle. I think this is you know related to the solutions question we asked earlier, but this person is asking, is it more of a messaging and a policy issue is there more, maybe even education that we can do for consumers so we know when we're getting price couch by corporations. I mean, I don't want to put this on consumers consumers are having it hard enough right now right they're paying higher prices at the pump they're paying higher price the grocery store. They're probably losing their job or struggling to put food on the table. I just, I think this at the end of the day. What we have in this in our economy is a real power imbalance where mega corporations hold an immense amount of power, especially relative to consumers to workers to families to small businesses, and it is incumbent on the government to regulate them right is incumbent on the government to tackle excess profits and coming on the government to crack down on price and coming on the government to make sure that they are, you know, corporations are just generally taxed appropriately that we're addressing the shareholder agreed that has gotten us into this, into this point in the first place and to invest in a system that actually works and so you know I'm really sort of resistance idea that this should be on consumers I think it's always helpful for consumers to know what's going on. And I think you know the real responsibility is on the public sector to take on the excess corporate power that we have in our economy that is driving a lot of the problems that we're seeing right now. So to help connect the dots, it, you're right, I, and I agree with you it shouldn't fall on the consumers, but we all want to know what to look out for what the future holds for us. So I will ask this question to each of you, maybe Michael starting with you. What is your outlook for inflation impact to consumer wallets in the coming months what what do you think we should be expecting. So by being the Republic of reporter. I actually have some optimism here. And I'll caveat it though at the end. So, so not to disappoint you, but we are seeing some moderation in the supply chain, you know, the, the shutdowns in Shanghai really did a lot to allow congestion to to to be eased, to allow prices to fall so the $20,000 figure that we were seeing last year is now $7500. That is still three or four times more than what companies were paying before the pandemic, but it's obviously less than the 20,000, you know, it's obviously less than that $20,000 figure. At the same time, you know, there, there is sort of the signal that demand is shifting back to hopefully a more normal balance between services and goods, if not even being muted on both sides. So that could have a lot that could do a lot to minimize the supply chains effect on inflation. What the what sort of the red flags are or sort of the unknown unknowns right now is July 1, the, the, the labor contract on the ports of Los Angeles and Long Beach expired. So there's, there's a potential for work slowdowns and potential for strikes is a potential that could kind of slow things down. And we're also kind of heading into this season of when companies start bringing over stuff for back to school and for the holiday season. And we don't know what's going to happen we are far more congested than we were before the pandemic at our ports and in our, in our supply chains. So, are we going to see a complete return to what we had last year, or are we in a better shape I think it's still at least a month before we know where we are with that. Great Claudia, any words on what consumers can expect. The first thing I'd underscores, you know, we talk about inflation, inflation is an increase in prices. Right, like what we pay and a lot of people don't get big raises and all that so I don't want to give any hope, or, you know, confidence that the prices are going to come down. A lot of inflation prices have risen a lot. This is, you know, inflation coming down doesn't mean prices are coming down. Right, so there's still the strain on the budget that people are experiencing now. That's probably going to be with us. I do think that, and we've already seen signs that outside of food and gas that inflation has been stepping down. So if you look on a monthly basis, not like comparing across a year, the pace has slowed pretty notably relative to last year. Now that's not good enough. I mean, this is why the Fed is continuing to raise interest rates were still above where we were before. But there are signs of improvement. But we had signs of improvement last summer. I mean, this is why the Fed was, you know, transitory inflation for several months last summer inflation month over month step down. And then Delta came and then Omicron came so it's, you know, we are no way ready to take a victory lab or to be confident that things are getting better, but at least the signs. And it's probably about February this year are are more encouraging. But again, if a lot of the pain is coming from food and gas, that's not the case. And the housing is is still a huge problem which has. I mean, that's really a, again, one of these problem. It's a problem that we had before we didn't have enough affordable housing. As it turns out what they talk about house prices or rent prices are cyclical. That's economist talk for when the economy is good rents go up. We had a really strong labor market recovery and it's incredibly sad that we're getting people renters are getting punished for that. They didn't finally move out start a family. And we have had a chronic under supply of housing. So again that's not that that's a bigger problem that goes beyond this but that's those three things are really important to people and I don't see relief coming on those soon. We're keen. Yeah, I mean I think I've learned my lesson over the course of the last year did not make predictions. They're never going to be right. But I did want to pick up on a point that Claudia lifted up which is, you know, we talk about inflation sometimes like it's this abstract thing that's just sort of happening and doesn't really affect that's maybe it affects their gas prices. But we care about inflation because we care about people's economic security right we care about people's ability to live a good life, a life of dignity. And so, while I will not predict what's going to come with prices and inflation because I think a lot of that depends on the steps we take as a as you know, a monetary policy side and on the fiscal policy side. I do think that we also need to be looking at the other side of things which is how do we make life more affordable for people right. I mean to the housing point, we can this is a long, this is a long game, but like we can invest in more housing supply like that is fundamentally one of the core problems that we have right now for housing and the price of housing right, we can, you know, strengthen the ability for people to join a union and to be able to bargain more effectively at work and get higher wages we can make sure that we have access to affordable affordable and robust childcare system right. So there are lots of things that we can do to make people's lives easier. And I think when we look at inflation sort of in isolation. We sort of miss the point of why we care about inflation in the first place because, you know, we often say we are the economy it's idea that when people do well when families do well that's from the economy does well. And I think that's really the needs to be the driving principle as we think holistically about the crisis that we're in. Thank you all for that really helpful context we don't have to make predictions but now we know what we need to collectively work on as a country and society. So I do want to turn now more officially to audience q amp a we got a bunch of really smart questions submitted even before the panel started. So we're keen starting with you back to this idea of these ocean carriers which have consolidated from hundreds to a small handful today. And I wonder what can a free market do to counter the monopolistic power and curb price scouting, and this is from a transportation consultant this question. Well thanks for the question I'm also going to, to give it off to Michael this I'm sure he has thoughts here too but you know my response this is we don't live in a free market right we live in a market that is fundamentally shaped by and for these big ocean carry example is kind of the perfect example in many ways and, and, you know, I think, just to repeat what I said earlier I think that's why we really need to look at the range of tools that we have in our toolbox to start to rebalance this power dynamics, including by addressing the rampant corporate consolidation that's endemic in our economy and increasing competition, but then also making those big investments, you know, empowering our regulators taxing more effectively. You know, I think I just I sort of reject the premise of the question to some degree but I'll see me Michael has a more insightful thought here. Yeah I think one thing that's that's really been interesting to me is that even as recently as this week the Biden administration has talked about the, the, you know monopolistic practices of ocean carriers. But then the federal government's regulator for ocean shipping which is the federal maritime commission study this and they came to the conclusion that the those increases that we talked about the 2000 the $20,000 spikes that we saw were due to demand and to the supply disruptions, and we're not due to anti competitive behavior. That's sort of, you know that the own agency of the federal government is obviously it's not, it's kind of officially not the Biden administration is independent. But that goes against sort of the talking points of the White House has used and they referred a lot to the ocean shipping reform act which is an example of legislation, the sort of narrow legislation that Congress has approved that does help the federal maritime commission have more teeth, but it doesn't, it also, it doesn't directly address anything to do with those prices it doesn't directly address any of the consolidation that we've seen in the White House. And the sponsors of the bills and Congress really haven't wrestled with with this conclusion. And so, I'm not quite sure what the game plan is of the White House or Congress to to deal with that. Clearly, there's a question about the Biden administration before I ask it just a reminder to our audience that you all can ask more questions with the Q amp a function. If you just click it at the bottom of your screen. So, this question again related to the Biden administration, any of you guys can take it. The question is, if the Fed does not have an appropriate tool and since counting on congressional action seems rather widely optimistic. As an analyst what do you all think about the Biden administration's ability to act through international cooperation, and we can also brought it brought it out to any any other tools that the administration has as well. Right well, the beginning mentioned how problematic or reliance on the global energy global oil market is the, we need more supply, right like that will help bring prices down. So, the idea, the United Arab Emirates, Iran. I mean like the people who have the countries that have supply. It's problematic, right, both in terms of OPEC still is not up to their pre pandemic production. Right so this isn't just about United States producers, holding back on supply, this is also globally. So, and it appears that the administration has put in an effort, in particular with Saudi Arabia. This is an uncomfortable place to be like in terms of international cooperation. Do you think one thing that I'm surprised the administration has gone back and forth on the United States and Europe, we put an embargo on ourselves, right like this is very much the opposite of the 1970s. And then embargo prices went up but in support of Ukraine and to punish and try to, you know, have made it harder for Putin to fight this war. We have limit rush is the second largest oil producer. Right so we made our international cooperation is, I mean, on a geopolitical front has had ramifications on an economic front. I mean like we are participating helping support a war. Right so it is really complicated and our options of international cooperation to get more supply are really problematic. So all of this underscores that if we can't fix it right now, we ought to be Congress ought to be working really hard to create energy like really solid energy proposals and legislation that keep us out of this again so that we are not trying to deal with dictators to reduce hardship at home. Let's move on to the next question. Rikki and you had said before that the owner should not be on consumers but many of us do want to just be smarter consumers. So any of you again can take this question, but this audience question is how do you distinguish between profits based on supply and demand versus rip offs or price gouging. How can we just be smarter when we're choosing who to purchase from. It's really hard right because and I think like the some of the worst offenders of price gouging and profiteering are big companies that sell essentials right so they have market power in, you know, in loads of ways right they have market power because they're big, they have market power probably through the supply chain, and they sell price and elastic goods which means that people's demand is not particularly responsive to price so say you're a parent with, you know, two kids under two, many of my friends in, you need a diaper you need a diaper right like it doesn't really matter if a box of diapers is $50 or $75 or $100 if you have to put a diaper on your baby. And so, you know, I think that's what makes it really hard for a consumer to be discerning because, you know, the worst offenders are the are the companies that sell goods that you need, and you need them because they are essential to your life right. And, you know, I would love to say like go shop at your small businesses which you should do of course, and small businesses are also bearing the brunt of a lot of the price hikes up the supply chain right so take your local bike shop. If the price of steel goes up which it did you know there was a earnings call where we saw the CEO one of the largest steel producers in the US, you know, really excitedly telling their shareholders how they were able to jack up prices. The bikes in your local bike shop are going to just be more expensive because they have to pay more for their input costs and that's just going to be passed on to you as a consumer. So, I think really as a consumer being really aware that there are, you know, the big companies are at the root of a lot of the issues that we're seeing. I think the sad thing is because of both monopoly power and market power generally consumers don't have a lot of choice right that's in some ways the definition. So, unfortunately I don't know how to be a smarter consumer so please let me know. So your research and attend to panels like this as much as you can at least. So another question for anyone. This cannot be unique to the United States right how do we compare to the rest of the developed countries, if they're having inflation as well is it less or more than the US if anyone has contacts on that. I did want to ask, oh go ahead Claudia. I did want to ask this question I guess to you guys as well because there was a paper that was put out by one of the Federal Reserve banks that said that try to look at why is inflation higher in the US than in other developed countries. And what they did was they took out the gas and energy and food prices and found that 3 percentage points of inflation was related to the additional stimulus efforts that we made through the COVID recovery relief plans. And so I'm curious what you guys think about that. Yeah, so basically I'll be getting to argue questions like this with my peers until the day I die. So it, I've read that study, and, and there's another study at the San Francisco Fed that says basically the rescue plan cause none of the inflation, because it's really, is really hard to do the comparisons, comparing the United States to Europe is not an apples to apples comparison. Like I don't care if you just strip out, you know, the food and energy are housing market is different. And so I think there's a lot of clarity by the Federal Reserve that almost a third of the, the rent inflation is people moving around the United States because of COVID. Right and again we didn't we don't have a house. I mean first of all, people in Europe don't do that they tend to stay where they're at. And then we didn't have the housing supply to deal with that. And so we have different health care like there's so many differences between the two places in terms of how we spend and what you know like so I think it's an extremely hard comparison to do and that's why you do other comparisons like over time in the US and yada yada. The thing that I found interesting that's another disruption that's really similar is the labor shortages. And even in the United States and in Europe they really are struggling to get workers back to, and that that's something that has basically nothing to do with the war in, in Ukraine, right so there are definitely similarities and the disruptions but it's not a perfect lineup. But yes, if you take the data and you pull off food and energy we have more of what's referred to as kind of the core inflation than Europe does. So, but, but I don't that's not. There are a lot of things that are different about the United States than Europe than just the rescue plan. So that's why that comparison is hard. Great context. One last question related to consumers being more educated. What is the most relevant or what are the most relevant economic indicators for everyday consumers basically what should we be paying attention to. I can tell you what I always pay attention to and it's kind of perfectly timed because tomorrow's job stay. I think it's always really important to pay attention to how the most marginalized are doing in our economy. That's, that's how you really know if things are getting better or getting worse. And so, focusing on the black unemployment rate is to me like one of the best signals that you can look at to see, you know, are we actually creating an equitable economy are we actually closing racial gaps and employment. Employment is not everything job quality matters to labor force participation matters to but I think really focusing in on, you know, the employment rates of folks who are tend to be left out of the labor market at the best of times is a really good indicator is that indicators to pay attention to great cloudy Michael any final thoughts on what we should be paying attention to. I guess as a consumer it's people's experiences are so specific, right to what they need so I totally agree that understand like what's going on in the labor market or their jobs, which I mean frankly should be important to most consumers most families what the job prospects are. I find it. I find it really hard to give advice, like on this grand scale of what to look at and the account and frankly I don't think looking at the aggregate inflation rate is a particularly good signal of how financially secure a consumer is or you know a community is I'll speak to one that we shouldn't pay attention to. And I think that's you know the stock market going down I think we shouldn't be looking at how Wall Street responds to think that that is a reflection of the economy and not confused that what they're responding to is what they predicted and the benefits and free money that we've enjoyed not just for the past two years, but for 14 years, you know the Fed has been involved in keeping rates low and buying bonds at really historic rates. And then on top of that, you know there was a huge corporate tax cut that provided a big stimulus for corporations. So I think that is sort of what was responding to, and doesn't necessarily mean that job losses are the next step. So I think that's a good point to end on.