As pricing fears peak, corporate America lacks faith in the Fed to control inflation: Survey

The stock market has overcome inflationary fears on the way to setting new records this year, but in C-suites, the concerns about input costs, wage pressures and Fed policy remain elevated.

But in the past two weeks, the market has bounced back from a post-Fed meeting swoon to set new records because the Fed view has remained that inflation is transitory, and the most recent national price index data has provided support for the policy. While Consumer fears about inflation peaked in May. "What was a bit comforting was how fast it abated in sentiment surveys in early June. Many prices have begun to crest," Swonk said, though some materials, such as lumber, remain well above pre-pandemic levels even after a recent decline.

Among the CFOs with whom he is in contact, wage pressures are the biggest source of concern, and CFOs expect that to remain through the end of the year. Globally, many firms have already raised prices. EMEA companies responding to the survey are the most likely to say they are already passing on input cost increases to consumers, at 45% of CFOs, versus only 19% of U.S. CFOs. But more price increases could be coming: 33% of U.S. CFOs said they will have to raise prices if costs continue to rise.

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