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January 30, 2020

CFTC Proposal Fails to Stop Excessive Speculation in the Commodities Markets, Driving Up Main Street Prices for Cereal, Bread, Gas, Soda, Beer and Much More

Thursday, January 30, 2020
Contact:, 202-618-6433

Washington, D.C.  –  Dennis M. Kelleher, Chief Executive Officer of Better Markets, issued the following statement with respect to the Commodity Futures Trading Commission’s (CFTC) newest proposal of a position limits rule:

“The CFTC is required by law to prevent excess speculation in the derivatives markets for commodities and the primary weapon to do that is limiting the positions of speculators.  From the statements made at the meeting, today’s proposal utterly fails to do that.  Worse, masked behind impenetrable and often misleading technical jargon, it will open a series of loopholes that financial speculators will exploit to drive up prices, fuel boom-bust cycles, and increase their profits at the expense of consumers.

“The commodity derivatives markets influence prices for food, energy, and key metals and industrial inputs.  Thus, every hardworking American is going to pay the price for this regulatory failure, because they will pay more for everything from cereal and bread to gas, soda and beer.  More than 80 studies have demonstrated that speculation at levels permitted in the derivatives markets—which this proposal appears to do nothing about—have been harmful to the very people the markets are meant to serve.

“These markets exist for physical producers and purchasers to trade and price products and hedge risks.  Speculators are tolerated only to the extent they support those vital, socially productive activities.  Prohibiting excess, socially damaging speculation is critical to the proper functioning of these markets.  This proposal does the opposite:  it will unleash socially useless speculation by incorrectly permitting it to be re-labeled ‘hedging,’ providing unjustified exemptions, and allowing exchanges to seek ‘helpful’ speculation.  The proposal would thereby open avenues for—rather than put limitations on—speculation.  Making matters worse, the CFTC is again doing far too little to eliminate the pernicious impact of so-called commodity index funds, which Dodd-Frank provided express authority to address.

“Judging from the public statements this morning, this proposal is little more than a capitulation to financial speculators and a slap in the face to America’s Main Street families whose pockets will be picked to increase profits.  For the past 10 years, the industry has opposed position limits at every opportunity and used every tool, including litigation, to prevent the CFTC from protecting consumers, producers, and markets against excessive speculation.  It’s past time for the CFTC to protect America’s families and finalize a position limits rule that actually addresses the many market disfunctions caused by excessive speculation.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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