The American Prospect The Federal Reserve chair’s semiannual monetary report to the Senate Banking Committee is not typically of great interest to the average American. Committee members usually lob a predictable set of questions: when the Fed will raise or lower interest rates, whether they expect the economy to grow or slow, and maybe whether the central bank is fulfilling its supervisory duties in overseeing large banks. But Jerome Powell got a bit of a surprise this year when Sen.
Sherrod Brown (D-OH), the Banking Committee chair, launched into his opening statement. “The biggest corporations are always finding new ways to charge people more to increase their profits,” Brown said. “Fast-food restaurants and big stores are experimenting with electronic price tags, so they can change prices constantly, making it easier to sneak prices up little by little.
” He called for legislative measures “to take on corporate price-gouging,” which, he argued, had “nothing to do with higher interest rates.” | Later, Brown confronted Powell directly over the increasing use of algorithms that analyze price information acquired across a whole market. If a business knows what its competitor charges, it can adjust prices upward in real time, maximizing what it can earn.
“Are you concerned that the wide adoption of these price-gouging strategies, these pricing schemes if you will, will contribute to inflation?” Brown asked. Powell stammered through a response, keying in on.
