CEOs Expect Inflation to Persist, Despite Rate Hikes

February 10, 2022

The Federal Reserve is expected to kick off a series of interest rate hikes in an effort to combat surging inflation, but the nation’s CEOs expect inflationary pressure to persist, according to a recent survey from the Conference Board.

Nearly 75% of the CEOs surveyed said that rate hikes were unlikely to quickly stem inflation. The CEOs expect supply chain constraints and rapidly climbing wages to persist well into 2022. Roughly 85% of respondents said they expect wages to rise by at least 3% in the next year, up from 79% who felt the same way when surveyed last quarter.

The CEOs are also preparing to pass their higher labor and transportation costs onto consumers. More than a quarter (27%) of those surveyed plan to increase prices in the next six months, while nearly half (47%) said they expect to do so within the six to twelve months.

Overall CEO confidence has fallen significantly in recent months. The index that tracks sentiment reached an all-time high of 82 in the second quarter of 2021 and has fallen 25 points since then. The first quarter’s reading of 57 is the lowest since the third quarter of 2020.

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