Moody’s Chief Economist: We Need More Oil Production and Profits are ‘Great Incentive’ for That, Gouging Isn’t Causing Inflation

On Thursday’s broadcast of CNN’s “Early Start,” Moody’s Analytics Chief Economist Mark Zandi stated that he doesn’t give any weight to the argument that price gouging is causing inflation and argued that profits by oil companies “have a purpose. They’re a great incentive for these companies to go out and put more rigs in the ground and produce more oil and get those prices back down.”

Zandi stated, “I don’t put any weight on the price gouging argument for the high inflation. There’s a long list of reasons for the high inflation. At the top of the list is the Russian invasion of Ukraine and the spike in oil prices. Very close second is the pandemic and the impact on supply chains and on labor markets. Price gouging, I just don’t see it. I mean, you look at profit margins economy-wide, across all companies, that’s falling. And it’s been falling now for more than a year. … Maybe there are some sectors of the economy, you pointed to energy, and the meatpacking industry has been called out, where margins are high. But even there, for the energy industry, we want them to produce more oil. We need more oil. So, I’m not so sure — these high margins, these high profits, they have a purpose. They’re a great incentive for these companies to go out and put more rigs in the ground and produce more oil and get those prices back down.”