While making record profits, large consumer brands have continued to raise prices as the Federal Reserve works to stabilize inflation, reports The New York Times. Coca-Cola, Unilever, and PepsiCo all reported significant price hikes in the second quarter.
On Wednesday, Coca-Cola shared that its profits last quarter rose 33 percent compared to last year, to $2.5 billion.
The Fed uses interest rate increases to curb inflation, which in turn reduces demand for goods and services; however, food prices tend not to budge as people rely on the items to survive. Additionally, food prices are affected by myriad factors including ingredient prices, politics, and issues like the historic avian flu epidemic that killed tens of millions of birds. Particularly, the end of Russia and Ukraine’s Black Sea Initiative has pushed up prices for key commodities.
“The Fed really has no ability to resolve those issues,” David Ortega, a food economist at Michigan State University said.
Prices for consumer goods have moderated, however, inflation remains above the Fed’s goal, rising 5.7 percent over the year through June. Full Story (Subscription Required)
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