WASHINGTON, D.C.— Dennis M. Kelleher, Co-founder, President and CEO, issued the following statement in connection with the release of a Better Markets Fact Sheet on the need for the CFTC to investigate the role and impact of financial speculators in the commodities markets. On Thursday morning, the House Agriculture Committee will hold a hearing that is expected to address a number of these issues.
“Skyrocketing prices in commodity markets are driving financial speculators’ gigantic, record-breaking, and historic profits and bonuses. That money is coming directly out of the pockets of American families as the prices for gas, cereal, bread, and other everyday commodities continue to increase while also being highly volatile. Because most Americans live paycheck to paycheck and barely make ends meet, America’s families simply do not have the income or resources to pay for these price increases for everyday necessities without making painful sacrifices.
“Commodity prices are supposed to reflect actual supply and demand and those markets are supposed to prioritize price discovery and hedging by physical producers and purchasers like America’s farmers. Financial speculators are supposed to have a very limited role in those markets and can undermine critical social policies and objectives if their activities cause excess speculation. That’s why the CFTC is mandated to impose position limits on speculators. That’s also why the CFTC must conduct a comprehensive, thorough, data-driven, and granular investigation of commodity markets to determine the role and degree of speculation on a commodity-by-commodity markets as well as the effectiveness of the existing position limits.
“While the CFTC Chair has occasionally stated at a very high level and in summary fashion that the CFTC is vigilantly monitoring the commodity markets and that he has seen no evidence of excess speculation, that is insufficient. The pain at kitchen tables caused by steep commodity price increases and volatility is real. The American people see the speculators’ profits and struggle to pay the increased prices for critical products. If it hasn’t already, the CFTC must immediately conduct an investigation, and, if it has, it needs to disclose at a granular level the details that show each commodity market is not suffering from excess speculation and that position limits are working. America’s families and farmers deserve no less.”
The facts demonstrating the need for the CFTC to conduct an investigation are detailed in our Fact Sheet here.
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 www.bettermarkets.org