Impending recession unlikely to be brief or shallow if elevated inflation lingers

I wish I could share the optimism of all those who think we are going to have a “brief and shallow” recession (see Wednesday’s post) and then inflation will be gone. That’s just not the way the world works.

A survey of executives out yesterday from PwC makes my point. This one is not of CEOs, but rather a mix of top finance, HR, tech, marketing, etc., leads, with some board members thrown in as well. They were asked to rate the risks facing corporations, and “talent acquisition and retention,” “rising production costs,” “supply chain disruptions,” and “inflation” all rated higher than “recession.” If the recession is going to be so brief and shallow that it doesn’t tamp down concerns about the costly war for talent or rising production and supply chain costs, what good is it? After all, those are the very things that continue to drive non-energy inflation up.

I’m more inclined to agree with economist Jeffrey Sachs, who said this week that he doesn’t see inflation going away “anytime soon,” and believes there will “need to be more aggressive action by central banks and especially the Fed.” You can read how Bank of America CEO Brian Moynihan breaks the risk down here.

And since it is Friday, some feedback: Aron Cramer, CEO of Business for Social Responsibility, correctly pointed out in response to yesterday’s report on the Business Roundtable’s shift to stakeholder capitalism, that the BRT had a very conflicted response to the bill passed by Congress last week. While it praised the climate provisions—“We continue to believe that congressional action on energy and climate is critical to spurring additional investments in new technologies and enabling the U.S. to lead the global transition to a greener economy”—it opposed the bill because of the 15% minimum corporate tax. Apparently, BRT members don’t see paying a reasonable share of their income in taxes as part of their social responsibility. I hope that decision at least provoked some heated internal debate. 

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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This edition of CEO Daily was edited by Chloe Taylor.