We learned this week that the Consumer Price Index climbed 3.5% in March from a year earlier, up from 3.2% in February, and faster than most economists anticipated.

This poses a conundrum for central bankers who have made it clear they want to see further evidence that inflation is cooling before they cut interest rates.

The Fed’s high interest rates haven’t pushed America to the brink of a recession, fortunately, but they haven’t slowed inflation as much as policymakers had hoped.

The question is whether Fed officials can cut interest rates at all this year.

Joe Biden acknowledged that “prices are still too high for housing and groceries”, and said he was “calling on corporations, including grocery retailers, to use record profits to reduce prices”.

What’s the president getting at?

Corporate profits reached a record high in the fourth quarter of last year.

The easiest explanation for record corporate profits at the same time prices remain elevated is that corporations have enough monopoly power to keep prices high.

(Note that many corporations are also shrinking the size of the products you’re buying without lowering their prices – a variant of the same thing.)

This is one of the biggest reasons the American public is not yet crediting Biden with a great economy. Most people still aren’t feeling it.

In 2023, PepsiCo’s chief financial officer said that even though inflation was dropping, its prices would not be. Pepsi hiked its prices by double digits and announced plans to keep them high in 2024.

If Pepsi were challenged by tougher competition, consumers would just buy something cheaper. But PepsiCo’s only major soda competitor is Coca-Cola, which – surprise, surprise – announced similar price hikes at about the same time as Pepsi and has also kept its prices high.

The CEO of Coca-Cola claimed that the company had “earned the right” to push price hikes because its sodas are popular. Popular? The only thing that’s popular these days seems to be corporate price gouging.

We’re seeing this pattern across much of the economy – especially with groceries. At the end of 2023, Americans were paying at least 30% more for beef, pork and poultry products than they were in 2020.

Why? Near-monopoly power. Just four companies now control processing of 80% of beef, nearly 70% of pork, and almost 60% of poultry. So of course it’s easy for them to coordinate price increases.

The problem goes well beyond the grocery store. In 75% of US industries, fewer companies now control more of their markets than they did 20 years ago.

What should be done?

First, antitrust laws must be enforced.

Kudos to the Biden administration for enforcing antitrust more aggressively than any administration in the last 40 years. This administration has taken action against alleged price fixing in the meat industry – which has been a problem for decades.

The Biden administration has sued to block the merger of Kroger and Albertsons – two giant grocery chains.

Kroger operates 2,750 stores in 35 states and the District of Columbia. The company’s 19 brands include Ralphs, Smith’s, King Soopers, Fred Meyer, Food 4 Less, Mariano’s, Pick ’n Save, and Harris Teeter. Albertsons operates 2,273 stores in 34 states. Its 15 brands include Safeway, Jewel-Osco, Vons, Acme and Shaw’s. Together, Kroger and Albertsons employ around 700,000 people.

The Biden administration is suing Amazon for using its dominance to artificially jack up prices, in one of the biggest anti-monopoly lawsuits in a generation.

The Biden administration is suing Apple for using its market power to control its apps and prevent other businesses from offering them.

The administration successfully sued to block the merger of JetBlue and Spirit Airlines, which would have made consolidation in the airline industry even worse.

But given how concentrated American industry has become, there’s still a long way to go. Biden should make his antitrust enforcement against corporate power a centerpiece of his campaign.

Second, big corporations must not be allowed to use their power to gouge consumers.

Senator Elizabeth Warren and others recently unveiled the latest version of their Price Gouging Prevention Act.

“Giant corporations are using supply chain shocks as a cover to excessively raise prices and sometimes charging the same price but shrinking how much consumers actually get,” Warren charges.

The bill would empower the Federal Trade Commission (which would also get $1bn in additional funding) and state attorneys general to stop companies from charging “grossly excessive” prices, regardless of where alleged price gouging took place in a supply chain.

The legislation would also protect small businesses – those earning less than $100m – from litigation if they had to raise prices in good faith during crises, and require public companies to disclose more about their costs and pricing strategies.

I don’t have any illusions that this bill will find its way into law soon. Democrats hold a slim majority in the Senate, and not all Democrats support it. Meanwhile, Republicans and their business backers are dead set against it – and are eager to blame continued high prices on Biden, not on corporations.

But this bill is just as necessary as aggressive antitrust enforcement – and an example of what could and will be done if Democrats sweep the 2024 elections.

The record profits of large corporations are coming out of the paychecks of average Americans, who are still struggling to get by.

Biden and the Democrats must say this loudly and clearly and tell the public what they are doing – and will do – to stop corporate monopolies and price gouging.

• Robert Reich, a former US secretary of labor, is a professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His newest book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com