Fed Has a Sunny View of Inflation While Companies See the Clouds

SourceYahoo News
SectorEconomy
CountryMiddle east

Oops!Something went wrong.Please try again later.Jeran WittensteinJuly 18, 2021, 5:30 AM·4 min readFed Has a Sunny View of Inflation While Companies See the CloudsIn this article: Oops!Something went wrong.Please try again later.

(Bloomberg) — The Federal Reserve may be downplaying the risk of lingering inflation, but those with arguably the best vantage point — the companies themselves — are taking a less optimistic view of rising prices.

Just last week, Conagra Brands Inc. and PepsiCo Inc. signaled that higher input costs will be more than a blip.

Instead, they expect everything from raw ingredients to labor to remain substantially more expensive in coming months.

“I’m not going to assume it’s going to be transitory,” PepsiCo Chief Financial Officer Hugh Johnston in an interview on Bloomberg TV on July 13. “It’s going to be with us through the better part of next year.”

If these forecasts are accurate, equity investors will eventually have to reckon with a sustained inflationary environment. They’ve been complacent so far,...read more...