The macroeconomic outlook continues to dominate the executive agenda. Last year, when demand overshot and supply chains sputtered, many firms discovered pricing power they never experienced before.
Weighing the Risks of Inflation, Recession, and Stagflation in the U.S. Economy
The biggest liability could be how policymakers respond in the next few months.
June 10, 2022
Steven Puetzer/Getty Images
Summary.
It’s easy to point to the U.S. economy’s vulnerabilities: Despite the strong labor market and strong household balance sheets, consumer confidence has been depressed for a while, likely driven by energy prices. Deteriorating business sentiment can weigh on investment rapidly, robbing the economy of momentum. But the greatest risk for a recession is monetary policy makers, who in trying to moderate inflation have pushed up the risk of a recession. The authors offer four priorities for executives to focus on while navigating the macroeconomic risks.