1/2/2024 0 Comments Dow jstock market newsBut the big question for investors, not to mention the Federal Reserve, is whether or not inflation is peaking.ĭanielle DiMartino Booth, CEO and chief strategist at Quill Intelligence. Penegor said those restaurants are no longer buying products from Russia.Ĭonsumer prices have surged. Although Wendy's does not have restaurants in Russia, there are locations in the former Soviet republics of Uzbekistan and Georgia. Meanwhile, Wendy's is watching what's going on in Russia and Ukraine closely. The company is finally starting to see traffic at its restaurants return to pre-pandemic levels at breakfast time, but many consumers are coming in later for breakfast than they were before 2020, Penegor said, adding that Wendy's has had to adapt to provide people with their "late-morning Zoom snack." Supply chain issues have been a challenge for Wendy's, he added, and the company is continuing to work on ways to hold on to workers. "We have to balance passing on prices and still being a relative value for consumers," Penegor said, adding that the chain also has to make sure it remains competitive on price with other fast-food and fast-casual restaurants. That's why prices have already gone up at fast food chain Wendy's.īut Wendy’s ( WEN) president and CEO Todd Penegor told Alison Kosik on the CNN Business "Markets Now" show that he hopes the company doesn't have to raise prices much more. Restaurant chains are trying to keep costs down, but commodity prices are rising and workers are demanding higher wages. "The Fed is reacting to inflation very strongly and they want to signal that they don't want to tolerate it and have it become embedded." "The Fed is predicting a short series of sharp rate hikes," Jones said. The dot plot suggests there could be seven rate increases in 2022. Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, added that investors may also be nervous about the Fed's so-called dot plot, which shows where individual Fed members expect rates to be at the end of the year. "People were a little delusional to think events in Ukraine would derail the Fed," said Julian Brigden, co-founder of Macro Intelligence 2 Partners, a research firm. That sounds an awful lot like stagflation, the combination of slowing growth and high prices.Īnd if investors were hoping that the Fed would show some restraint because of global geopolitical jitters, this forecast seems to debunk that. The Fed also is forecasting PCE inflation of 4.3%, up from 2.6% only three months ago. The Fed said that it now expects gross domestic product (GDP) growth of 2.8%, down from its forecast of 4% in December. The Fed slashed its economic growth forecast and boosted its inflation outlook. But investors may be worried about new economic projections from the central bank. The S&P 500 and Nasdaq pulled back from earlier highs too. The Dow gave up most of its gains and was flat following the Federal Reserve's decision to raise interest rates Wednesday. But sharper relief may not be felt until 2023. "We don't have a perfect crystal ball," Powell emphasized in a news conference.īottom line: "We still expect inflation to be high this year," albeit lower than last year, Powell said. In other words, we can't put an exact date on when inflation will come down. "That could actually push out the relief we were expecting on supply chains generally." That expectation remains largely the same, but "we’re already seeing a bit of short-term upward pressure in inflation due to higher oil prices," as well as supply chain snarls caused by the war. "Before the invasion of Ukraine by Russia…I would have said the expectation was that inflation would peak sometime in the first quarter, maybe the end of the first quarter of this year" and start to come down in the "back half" of the year, Powell said. That's partly because of the disruption caused by the Russia-Ukraine war. In announcing a quarter-percentage-point interest rate hike, Federal Reserve chair Jerome Powell said the central bank expects inflation to remain high until the end of this year. The surging prices that defined much of 2021 aren't going away as fast as many would hope.
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