What CEOs Are Saying: The Fed ‘Should Look Out the Front Windshield’

Here’s what some of the world’s corporate leaders had to say this week about the economy, consumer spending and advertising trends, among other topics.

“A perceptive analyst might wonder if talking about inflation, recession and other factors would lead to slower spending growth. We just don’t see it here at Bank of America.” (October the 17th)

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International business machines corporation

CEO Arvind Krishna:
“In the Americas, I find a very solid business environment. I find that most companies want to invest… If I go to Asia, it’s very similar… In Europe, I think we shouldn’t bury our heads in the sand. I think with the mix of energy and inflation, you can feel there’s some caution in the talks, though not in the data and not yet in what we’re doing as a business there. But it would be silly not to be prepared that there could be a bit of a recession just in Europe.” (October 19)

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Tesla Inc.

CEO Elon Musk:

Elon Musk


Photo:

Patrick Pleul/Associated Press

“The Fed’s decisions make sense if you look in the rearview mirror, but not if you look in the front windshield. And they should look out the front windshield.” (October 19)

American Express Co.

CEO Stephen Squeri:

“We have our recession playbook. You have a credit cycle playbook, and we’ll pull the playbook lever if need be, but pulling it at this particular time doesn’t make any sense. We’re seeing strong growth and we’re seeing strong credit results overall, so nothing new at this point.” (October 21)

goldman sachs group inc. CEO David Solomon:

“My conversations with CEOs tell me that they are reconsidering business opportunities and would like to see more certainty before committing to longer-term plans. As we head into the fourth quarter, I have a feeling the outlook will remain unresolved, although economic performance will vary by region and volatility is also expected to persist as markets continue to digest these factors.” (October 18)

nasdaq Inc.

Executive Director Adena Friedman:

Adena Friedman


Photo:

Jason Alden/Bloomberg News

“I want to refer briefly to the current market environment. As we enter the final months of 2022, we continue to find ourselves in the midst of an uncertain macroeconomic and geopolitical backdrop.” (October 19)

Procter & Gamble Co.

CFO Andre Schulten:

“We are also seeing consumers moving two different price points, so one group of consumers is looking for value by trading higher transaction sizes to find a lower cost per use or lower cost per unit, and we see other consumers that are more cash conscious, and very focused on spending cash… The strategy of offering pack sizes that range from less than $10 for some channels and consumers to more than $30 or $40 for others seems to be meeting the needs of consumers”. (October 18)

AT&T Inc.

CEO John Stankey:

John Stankey


Photo:

Matt Winkelmeyer/Getty Images

“We are seeing bad debt starting to return to pre-pandemic levels. We’ll certainly have to watch that if the economy gets any worse. It tends to correlate with what’s going on in the economy, but I don’t see anything right now that suggests we’re out of pattern on anything.” (October 20)

Hasbro Inc.

CEO Chris Cocks:

“We have also seen the average consumer become increasingly price sensitive as the year progresses, which affects point-of-sale trends. Demand from the field of promotions and entertainment has become increasingly important and will be key in the coming quarters.” (October 18)

United Airlines Holdings Inc.

CEO Scott Kirby:

“There has been a permanent structural change in the demand for leisure due to the flexibility that hybrid work allows. With hybrid work, every weekend could be a holiday weekend. That is why September, a normally low month, was the third strongest month in our history. People want to travel and live experiences”. (October 18)

Pacific Union corporation

CFO Jennifer Hamann:

“In terms of 2023, again, still putting the plan together and a lot of pieces and moving parts, probably most of that is really what the economy will do. But we know we have opportunities to grow… We also know we have ongoing pricing opportunities, and we feel very confident in our ability to price above inflation in dollars.” (October 20)

tractor supply Co.

CEO Hal Lawton:
“As far as inflation is concerned, we anticipate there will be some moderation towards the second half of next year. But if you look at our two-year inflation buildups and roll them over to the first half of next year, we anticipate inflation to remain at elevated rates for at least the first half of next year. And I think that’s also reasonably consistent with the general kind of US macro outlook (Oct 20)

Omnicom Group Inc.

CEO John Wren:

“I think all the smart companies are seeing that, globally, these macro factors are a mix for more confusion in a complex environment on one level. On another level, new areas are emerging that did not exist before. If you look at the media, you look at all the providers who have decided to add an advertising model to the products they offer”. (October 18)

Netflix Inc.

Co-CEO Reed Hastings:

cane hastings


Photo:

Kyle Grillot/Bloomberg News

“What I underestimated was just the impact on advertisers. They can just reach fewer people, and then the 18-49 demographic is even faster than pay TV’s decline. So this is what’s really fueling the cycle, is the collapse of linear TV as an advertising vehicle outside of some properties like sports.” (October 18)

Nap Inc.

CFO Derek Andersen:

“It’s incredibly quick and easy for advertisers to turn digital performance advertising on and off as they look to gauge their investments and their own growth in their business. And that’s part of what we’re seeing here with the start and stop in growth rates and the acceleration and deceleration that we’ve experienced.” (October 20)

Freeport-McMoRan Inc.

CEO Richard Adkerson:

“To meet that demand, the energy transition will require a massive amount of copper and other steps to deal with it. Higher prices will be required to bring in new supplies, much higher prices than we have now, simply because the current price is not enough to incentivize the development of new supplies on the scale that will be required to meet this growing demand.” (October 20)

Quotes were extracted from transcripts provided by FactSet.

Email George Stahl at [email protected]

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