Corporate America's executives are sounding deeply uncertain about the country’s economic future. If CEOs grow even more wary about the growing set of risks, they could pull back in hiring and spending, denting the Covid-19 recovery.
Corporate America has been chalking up profits this year, but some executives are sounding deeply uncertain about the country’s economic future.
“Senior management is out there just as clueless as we are as to which way things are going to go,” said Jack Ablin, founding partner at investment firm Cresset Asset Management.“Look, no one knows,” JPMorgan Chase CEO Jamie Dimon said on the bank’s recent earnings call, referring to the path of interest rates — perhaps the biggest unknown hanging over the economy. “And obviously, everyone does their forecast.
“There is still a lot of cash in the system and there is real upward pressure on wages,” the CEO said. “But inflation is very real, and the Fed is already very late. We are going to be dealing with an economy that is not as robust. And you’ve got a lot of people dealing with inflation now who have never had to deal with it before in their lifetimes. That’s a concern.”
Kirk Crews, chief financial officer at solar firm NextEra Energy, spoke on an April 21 earnings call of “inflationary pressures and uncertainty in the solar supply chain.” He expressed frustration that price spikes were hurting his business because his own products — solar panel systems — are meant to partly offset cost shocks like those occurring in oil, gas and other traditional sources of energy.
“Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022,” the company said in a statement along with its earnings report.
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