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Global hyperinflation, companies are concerned

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Around the world, there is growing concern that hyperinflation will adversely affect company performance. As U.S. consumer price inflation approaches its highest point in 30 years, this pessimistic view is growing.

global hyperinflation

“Hyperinflation will change everything,” Jack Dorsey tweeted on the 23rd (local time).

Corporations are increasingly likely to face adverse effects on profits due to widespread inflationary pressures. The Financial Times reported on the 22nd that Whirlpool, a leading maker of washing machines, said that raw material prices for items such as steel and rosin were rising due to supply shortages, and that manufacturing costs could rise by nearly $1 billion.

Price increases are now chronic.

One of the world’s largest consumer goods companies, Procter & Gamble (P&G), raised prices on nine out of ten products last week. In today’s market, most products have higher prices than before the pandemic. PepsiCo and Tesla have both predicted price increases for the first quarter of next year.

A backdrop of inflation and supply chain disruptions is also beginning to weigh on economic activity in major countries. Also affected are the services sector, as restaurant meals, movie screenings and transportation declined.

Economic growth in China, the world’s second largest economy, also declined sharply. Due to the electricity shortage and the liquidity crisis in the Hengda Group, China’s Gross Domestic Product (GDP) growth rate fell to 4.9 percent in the third quarter of this year.

Likewise, the IMF lowered its 2018 growth forecast for the global economy in its recent World Economic Outlook report by 0.1 percentage point.

The Federal Open Market Committee (FOMC) is almost certain to reduce its $120 billion in bond purchases per month at the meeting on the 2nd and 3rd of next month.

As a result, the Fed’s first rate hike, currently planned for late next year, may be delayed.

For MetaNews.

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Jonathan Hobbs

Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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