Corporate margins on the Fed’s radar

The post-pandemic recovery gave businesses pricing power, as the boom in demand for manufactured goods meant that they could pass on increases in input prices relatively easily. Meanwhile, employees gained bargaining power due to labour shortages. All in all, the combination of rising margins and rising wages has fuelled domestic inflationary pressures. In some sectors, margins are at historic levels and the Fed is making no secret of its desire to see them squeezed back to more ...