--- title: 'America''s Corporate Monopolies Make Inflation Worse: Fed Report' description: New research from the Federal Reserve shows that corporate monopolies are driving inflation, and consumer prices, higher. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 501 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Kristen Bahler role: Managing Editor url: https://money.com/author/kristen-bahler/ bio: Kristen Bahler has spent more than a decade turning culture, work and consumer spending trends into conversation-driving stories. Today, she leads Money's sponsored content channel and reader-favorite franchises like Best Places to Live and Best Places to Travel. education: Northeastern University, MA Journalism at_money_since: 2016 articles: 52 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://www.linkedin.com/in/kristen-bahler/ published: '2022-05-27T18:51:13.000Z' modified: '2024-02-18T13:01:54.000Z' section: Economy and Politics tags: - News word_count: 498 canonical: https://money.com/corporate-monopolies-make-inflation-worse/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo of a grocery store full of people buying groceries](https://img.money.com/2022/05/News-Corporate-monopolies-inflation-worse.jpg?crop=0px%2C301px%2C2880px%2C1620px&quality=85) Do not pass go. Do not collect $200. In fact, why don't you go ahead and give Mr. Monopoly *all* your money? Rising corporate concentration — when only a few major companies dominate an entire industry — is worsening inflation, according to economists at the Federal Reserve Bank of Boston. In a new report, the agency finds that when production suddenly gets more expensive for companies, they often pass those costs onto consumers in the form of higher prices. When industries are more concentrated and there's less competition, however, that price hike becomes about 25 percentage points greater. In other words, monopolies don’t necessarily *cause* inflation. But since they tend to overcompensate for rising production costs by quickly jacking up their prices, they can exacerbate the problem. The report didn't point fingers at any specific industry, but in recent years, the [oil](https://www.nytimes.com/2022/05/24/business/energy-environment/glencore-price-fixing-bribery.html) and [meatpacking industries](https://www.politico.com/news/2022/04/27/meatpacking-ceos-congress-hearing-00028238), to name two, are among those most frequently cited as being dominated by a handful of conglomerates — to the detriment of consumers. The authors of the Boston Fed report, a regional arm of the U.S. Federal Reserve (currently [tasked with taming inflation)](https://money.com/dollar-scholar-fed-interest-rate-hike/), use data that spans from 2005 to 2018. Since then, competition among U.S. businesses has only declined, making their estimate a conservative one. “The US economy is at least 50 percent more concentrated today than it was in 2005,” the economists wrote. Price hikes don’t last forever. Historically speaking, prices usually stabilize after about a year, the Boston Fed found. Still, these are unusual times. [In March, U.S. inflation](https://money.com/inflation-highest-since-1981-gas-prices/?ref=/inflation-groceries-food-prices-rising/) rose 8.5% compared to the previous year, a level unseen since the 1980s. As the global economy emerges from the pandemic, inflation is plaguing many advanced economies, though there's an open debate about why it's hitting the U.S. particularly hard. Two inflation drivers, the [tight labor market](https://money.com/jobs-lost-during-pandemic-return-summer/) and [supply chain snarls](https://money.com/inflation-delays-car-fridge-purchases/), are almost universally agreed upon by economists. Corporate greed, on the other hand, is [more controversial](https://www.cnn.com/2022/05/10/business/inflation-prices-chamber-of-commerce/index.html). Progressive lawmakers like Massachusetts Senator Elizabeth Warren have pointed to record profits in industries where inflation rates are particularly high as an obvious impetus. (Conservatives have roundly criticized this notion). Take the oil industry, for example. In the U.S., drivers are paying about $4.60 a gallon on average — an all-time high, according to the automotive club AAA. The latest Labor Department data shows oil prices have surged more than 80% since last spring. Over that same period of time, gasoline prices spiked nearly 44%. Meanwhile, oil conglomerate Shell posted a record $9.1 billion profit from January to March, and BP reported its most profitable quarter in a decade. While Russia’s invasion of Ukraine no doubt mucked with global oil supply, politicians like Warren say corporations are taking advantage of the situation. Now there's data from our central banking system backing them up. [Inflation Is the Biggest Problem in America Right Now: Survey](https://money.com/inflation-biggest-problem-in-america/) [How to Save Money on Gas](https://money.com/how-to-save-money-on-gas/) [How to Save Money During a Summer When Everything Is Super Expensive](https://money.com/save-money-summer-high-inflation-gas/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/corporate-monopolies-make-inflation-worse/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Multinational Corporations", "item": "https://money.com/multinational-corporations/" }, { "@type": "ListItem", "position": 4, "name": "America's Corporate Monopolies Make Inflation Worse: Fed Report" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/corporate-monopolies-make-inflation-worse/#webpage", "url": "https://money.com/corporate-monopolies-make-inflation-worse/", "name": "America's Corporate Monopolies Make Inflation Worse: Fed Report", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2022-05-27T18:51:13.000Z", "mainEntity": { "@id": "https://money.com/corporate-monopolies-make-inflation-worse/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/corporate-monopolies-make-inflation-worse/#breadcrumb" }, "dateModified": "2024-02-18T13:01:54.000Z" }, { "@type": "NewsArticle", "headline": "America's Corporate Monopolies Make Inflation Worse: Fed Report", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2022/05/News-Corporate-monopolies-inflation-worse.jpg?crop=0px%2C301px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Corporate-monopolies-inflation-worse" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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