During the State Of the Union speech, the US president mentioned that companies might be keeping prices or volume adjusted even after raw material prices have reduced over the past five months. But is it true that corporations and consumers are living in different inflation worlds?
Given that most corporations that control consumer-related products, especially in developed countries are listed on stock exchanges. As per reports, the profit margins especially in the USA have increased to a 1950 level of 15%.
If this data is seen by a shareholder then it will be the most positive thing for them. But if the same is seen by governments or consumers it will not leave a good taste.
The only justification that corporates provide is that other costs have also gone up such as employee and logistics. And the fact is they have but if it was dollar to dollar rise then the rise in margins cannot be explained.
In 2024 almost 50% of the global population is going to conduct elections. Will this increase become an election agenda that would result in corporates witnessing peak margins or postponing their price hikes to post-elections?
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