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What business leaders are saying about inflation

Yahoo Finance Live anchors Brian Sozzi and Brad Smith discuss how inflation has impacted various areas of the economy, and business executives weigh in.

Video Transcript

[MUSIC PLAYING]

BRIAN SOZZI: Welcome back to "Yahoo Finance Live." Inflation remains a major problem for corporate America. Here's what some top CEOs have been telling us on the topic.

BRIAN MOYNIHAN: The challenge for certain people is, you know, they're having inflationary pressures, and they tried to hold price. And therefore, they got pinched on margins. And you saw that come out. But that will adjust its way through. The interesting thing is a little phenomenon going on earlier in the year and late last year was a lot of people got people from higher inflation economies to come work in the US and say you have to move on price, you have to get your balance back. If your inputs are going up, your outputs have to go up. Now, the scarcity that was driving this is also a different measure. So people can't get their-- can't get stuff.

HARMIT SINGH: We started taking price increases about a year ago because, you know, we were mindful of the fact that inflation probably is here, and here for longer than was indicated.

ENRIQUE LORES: We are showing that we can manage the company in this inflationary environment. We continue to see component cost increases year over year. But at the same time, we are able to manage our prices in the-- to compensate for those, and therefore the strength of our results.

ROB LYNCH: The labor model's still challenging, both from a wage inflation and a staffing standpoint. And obviously, we've got the commodity inflation that everyone is seeing. We've been able to strike a good balance between productivity and pricing to be able to mitigate some of the impact of that inflation, but it's still a challenging operating environment, where I've got to give credit to our franchisees and our team members who have been able to persevere through really what's been about two years of a new normal, seems like, every quarter.

BRIAN SOZZI: So Brad, I'm watching this, and this-- what executives are telling us, and my first thought is, rate hikes from the Fed aren't going to solve any of this stuff, and these companies are still going to be out there raising prices, in large part, because supply chain challenges. And these things will continue to take time to address. A rate hike is not going to change how you can get your goods out of China in a timely and a cost-efficient manner.

BRAD SMITH: Right. And everybody is-- everybody is competing to get those products to consumers quicker, into their fulfillment centers quicker, as well. And this actually kind of stood out and jumped out to me from Lululemon's report, because it's one of the few companies that we've actually heard plainly address the fact that they've got to pay higher to compete with other categorical competitors in their space in order to spend higher on airfreight, in order to get some of the actual materials that they need in order to produce the end product and then get that into their consumers and have inventory available as demand catches up.

And so with all of that in mind, there is so much of the inflationary environment that is directly, as we were hearing from Levi's earlier this week, that is directly correlated to the supply chain. And that's something that, to your point, Fed Chair Jerome Powell can't do anything about the supply chain.

BRIAN SOZZI: No. Well, the only thing we can do as consumers, go out and buy all this stuff now because it's going to be up--

[INTERPOSING VOICES]

--a lot more, yeah, by back to school and the shopping season. All right.