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Corporate Greed Fuels Price Hikes Despite Fed's Efforts to Curb Inflation, Warns Watchdog Report

According to a recent report by the watchdog organization, Accountable.US, significant S&P 500 consumer goods corporations have been escalating their prices in an attempt to augment their profit margins. This occurs in spite of the Federal Reserve's efforts to curb inflation through increased interest rates.


Despite earning billions in additional net income and allocating over a trillion dollars to affluent investors, large food industry corporations within the S&P have continued to increase consumer prices, revealed Liz Zelnick, the director of economic security and corporate power at Accountable.US.


The report, released the previous week, highlighted that companies like General Mills Inc., Tyson Foods Inc., and PepsiCo Inc., have conceded to profiting from these higher prices. These observations reinforce the notion that corporate avarice may contribute to inflation, a phenomenon some refer to as “greedflation.”


In recent earnings discussions, Ramon Laguarta, the CEO of PepsiCo, mentioned the possibility of "additional pricing," while a top executive at General Mills indicated the company has become "strategic in our pricing approach," as cited in the report.


According to the report, PepsiCo's net income rose by 16.9% to approximately $9 billion in 2022, while it committed over $7.6 billion to stock buybacks and dividends. Similarly, General Mills saw a 16.5% increase in its net income to $2.7 billion.


Executives at Ulta Beauty boasted about gaining from "significant price hikes," and Kimberly-Clark executives admitted that "pricing continues to drive our growth," as reported in the findings. Ulta Beauty's 2022 net income increased by 26% to $1.2 billion, and Kimberly-Clark saw a year-over-year net income increase of 6.3% to nearly $2 billion.


While the Federal Reserve has been incrementally raising interest rates to suppress inflation, Zelnick emphasized that "corporate profit-making is relentless" and will likely persist regardless of the Fed's attempts. For the first time since January 2022, the Fed last week chose to maintain current interest rates.


Zelnick further added, "Persistent corporate greed calls for stringent action from Congress. The Fed's efforts, although aimed at improving the economy, haven't yielded sufficient results and have, in fact, created potential economic fractures that could result in a recession. The risk simply isn't worth it."

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