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Illustration: Annelise Capossela/Axios

CEOs are speaking up about what we’ve seen in the government data: inflation. And some of them warn elevated levels of inflation could persist.

Why it matters: Prices for goods and services have been rising at a historic pace, a phenomenon that many economists have characterized as transitory.

  • Business executives offer unique perspectives on the matter as they are directly exposed to rising raw materials and labor costs.
  • Furthermore, they’re the ones setting prices on what their businesses sell.

What they’re saying: Inflation may be more than a temporary phenomenon.

  • "The inflation could be worse than people think," JPMorgan Chase CEO Jamie Dimon said on an earnings call Tuesday. “I think it'll be a little bit worse than what the Fed thinks. I don't think it's only temporary."
  • "[Policymakers] are saying jobs are more important than consumerism," BlackRock CEO Larry Fink told CNBC on Wednesday. "That is going to probably lead to systematically more inflation."

State of play: Executives are explicitly saying that they're raising the prices they charge customers.

  • "Is there somewhat more inflation out there? There is," PepsiCo CFO Hugh Johnston said on an earnings call Tuesday. "Are we going to be pricing to deal with it? We certainly are."
  • "Will Conagra take list pricing increases? The short answer is, yes," Conagra CEO Sean Connolly said. "And we have more pricing coming."
  • "[We’ve] done at least one large [price] increase earlier in the second quarter, and that was received fairly well," Fastenal CFO Holden Lewis said on an earnings call Tuesday. "But based on what cost is doing, we'll have to go to the market with some additional ones."

Yes, but: Not all companies are raising prices. Here’s what FreshDirect interim CEO Farhan Siddiqi told Bloomberg about how he was addressing customers’ concerns about inflation.

  • "We're lowering prices on fresh items like berries, salmon and ground beef," he said. "Right now we're also are absorbing inflation and not passing it along."
  • Lowering prices can be a smart strategy amid rising costs if FreshDirect is able to win more business.

The bottom line: While it's possible executives could be exaggerating risks affecting their business, they should still be taken seriously. During the previous earnings season, execs were unusually vocal about inflation at that time too. And their alarms showed up in the inflation reports that followed.

Go deeper

Bryan Walsh, author of Future
Sep 15, 2021 - World

The global food price crisis isn't going away

Data: Food and Agriculture Organization of the United Nations; Chart: Axios Visuals

Global food prices have continued to rise throughout the pandemic, and they're now at close to the highest level they've been in decades.

Why it matters: Beyond the hunger and suffering that comes with costlier food, high prices are driving serious political discontent around the world — and there's little relief in sight.

Powell gaining Senate moderates' support

Federal Reserve Chairman Jerome Powell. Photo: Al Drago/Bloomberg via Getty Images

Some Senate Democrats are urging President Biden to reappoint Federal Reserve Chairman Jerome Powell for a second term, suggesting that replacing him could erode the independence of the institution.

Why it matters: Public support from centrist Democrats has the potential to cinch reappointment for a figure credited with helping the country navigate the huge economic hit of the coronavirus pandemic. Powell's just completing what some termed a summer audition.

Ben Geman, author of Generate
1 hour ago - Energy & Environment

China vows end to building coal-fired power plants abroad

Chinese President Xi Jinping. Photo: Mary Altaffer - Pool/Getty Images

Chinese President Xi Jinping told the United Nations General Assembly Tuesday that his country "will not build new coal-fired power projects abroad" and plans to boost support for clean energy in developing nations.

Why it matters: The pledge, if maintained, would mark a breakthrough in efforts to transition global power away from the most carbon-emitting fuel.

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