© Reuters. Federal Reserve Chair Jerome Powell testifies during a U.S. House Oversight and Reform Select Subcommittee hearing on coronavirus crisis, on Capitol Hill in Washington, U.S., June 22, 2021. Graeme Jennings/Pool via REUTERS
By Francesco Canepa and Mark John
FRANKFURT/LONDON (Reuters) – The bosses of top multinationals are fretting about rising inflation but the very people responsible for keeping price growth in check – central bankers – seem unfazed.
Even as policymakers at the U.S. Federal Reserve, European Central Bank and elsewhere diverge on how quickly to wind down massive pandemic stimulus programmes, they agree on one thing: the recent surge in inflation is not a major concern.
Yet the latest set of corporate earnings calls are replete with mentions of the word “inflation”, with the tally up 1,000% on the year for U.S.-listed companies and 400% in Europe for companies, according to Bank of America (NYSE:) research.
The fact is that when CEOs and central bankers talk about inflation, they are mostly talking about different things. The following piece explains where they differ – and under what circumstances their interpretations could start to converge.
CEOs SEND INFLATION ‘ALARM’…
“Inflation” is the buzzword of the second-quarter earnings season as companies of all shapes and sizes grapple with price pressures stemming from pandemic-related hits to supply chains struggling to keep up with post-lockdown surges in demand.