New York CNN  —  Some progressives have frequently blamed corporate greed for fueling the high cost of living that Americans are fed up with. Yet new research from the Federal Reserve Bank of San Francisco casts doubt on the greedflation theory. Economists at the SF Fed found that corporate price gouging was not a primary catalyst for the inflation surge of 2021 to 2022. The Fed researchers did find that some companies exercised pricing power by raising prices above their production costs – a gap known as markups. For instance, markups spiked for gasoline, cars and other goods in 2021. Likewise, there were increased markups for repair, general merchandise, laundry, personal care and other services, according to the Fed. ‘Not unusual’ Of course, the inflation crisis was not limited to just a few key sectors. It was economy-wide. When zooming out and looking at markups across the economy, the SF Fed economists found little evidence that price gouging was the main culprit. “Aggregate markups – the more relevant measure for overall inflation – have stayed essentially flat since the start of the recovery,” the paper concluded. “Rising markups have not been a main driver of the recent surge and subsequent decline in inflation during the current recovery.” In fact, the SF Fed found that the path of collective markups over the past three years “is not unusual compared with previous recoveries.” ‘It angers them and angers me’ This runs counters to the argument from some progressives including Sen. Elizabeth Warren, who for years has refocused the inflation argument on corporate greed. “Right now prices are up at the pump, at the supermarket, and online. At the same time, energy companies, grocery companies, and online retailers are reporting record profits,” Warren said in December 2021. “That’s not simply a pandemic issue. It’s not simply some inevitable economic force of nature. It’s greed—and in some cases, it is flatly illegal.” More recently, President Joe Biden has called out corporate greed as a reason prices remain high. “If you take a look at what people have, they have the money to spend. It angers them and angers me that you have to spend more,” Biden told CNN’s Erin Burnett, pointing to the shrinking size of Snickers bars and other food products. “It’s like 20% less for the same price. That’s corporate greed. That’s corporate greed. And we have got to deal with it. And that’s what I’m working on.” In February, Biden said there are “still too many corporations in America ripping people off. Price gouging, junk fees, greedflation, shrinkflation.” “America – we’re tired of being played for suckers!” Biden said. Although the paper did not directly mention corporate greed, shrinkflation or Biden, the research undercuts the argument that greedflation drove the early inflation. White House spokesperson Jeremy Edwards told CNN in a statement that the study supports Biden’s argument that “record profits are increasing inflation in some sectors, such as gas and general merchandise.” “These markups should have reversed as we recovered from the pandemic—the fact that they haven’t means prices can come down if corporate profits come back to earth,” Edwards said. “President Biden has repeatedly called on large corporations to pass their record profits along to their customers by lowering prices. And he is taking on corporate rip-offs like hidden junk fees that costs families billions of dollars a year. The President will continue to call out corporate rip-offs and fight to keep money in Americans’ pockets.” ‘Looking for scapegoats’ The debate comes as inflation remains a major frustration for Americans – and a significant political liability for Biden ahead of the November election. Consumer sentiment, a metric closely tracked by the White House, unexpectedly tumbled to a six-month low at the start of May. It was the biggest one-month drop in nearly three years, a deterioration driven in part by concerns about inflation and interest rates. Greg Valliere, chief US policy strategist at AGF Investments, said the White House is “desperate to blame someone or something for inflation.” “Blaming greedy corporations is just looking for scapegoats,” Valliere told CNN. “There’s no prescriptions here that would have a major impact quickly, other than the Fed reluctantly raising interest rates – an option that, incredibly, isn’t out of the question.” Many economists blame the recent inflation surge on more traditional factors, namely higher production costs linked to swings in demand and Covid-era supply trouble. To be sure, inflation has improved dramatically over the past two years. After peaking at 9% in June 2022, annual inflation measured by the consumer price index (CPI) has eased to the low-to-mid 3% range. Rate cuts delayed However, progress in the inflation fight has stalled recently and the last three months of data have shown prices increased by more than expected. And inflation remains well above the 2% targeted by the Federal Reserve. The so-called final mile of returning inflation back to normal has proven to be difficult. This situation has prevented the Fed from giving Americans a break from elevated borrowing costs, which remain at two-decade highs. Federal Reserve Chairman Jerome Powell reiterated Tuesday that it “looks like it will take longer for us to become confident that inflation is coming down to 2% over time.” Although the SF Fed report pokes holes in the greedflation argument, other research has been more mixed. For instance, progressive advocacy group Groundwork Collaborative recently argued that corporate profits drove 53% of inflation during the second and third quarters of 2023. That report found corporate profits were to blame for 34% of inflation since the start of Covid-19. “There’s a reason most Americans blame corporate greed for high prices, and it’s because they know price-gouging when they see it,” Caroline Ciccone, president of progressive watchdog group Accountable.US, said in a statement. “It simply doesn’t add up when corporations enjoying record profits, enriching investors and giving their CEOs huge bonuses claim creeping price hikes were out of their control. They could have passed some success onto consumers in the form of stable and reasonable prices, but many chose to profiteer again and again.” Last year, the Federal Reserve Bank of Kansas City found that corporate profits contributed 41% to inflation during the first two years of the Covid recovery. However, that same Kansas City Fed paper noted that this is not unusual and corporate profits contributed even more (59% on average) to inflation during prior economic recoveries.