Warsh Calls 2% Inflation a Firm Fixed Target as McDonald's CEO Warns of Years of Elevated Prices

Yahoo Finance··US·Read original
4▲2 ▼1Impact / 5
Summary · why it matters

Federal Reserve Chair Kevin Warsh reaffirmed that 2% inflation is "a firm, fixed target" even as McDonald's CEO Chris Kempczinski warned elevated inflation will persist for "many more years at an elevated level." Warsh used his August Jackson Hole speech to argue inflation, not employment, is now the Fed's primary focus, and the Fed raised its benchmark rate by 25 basis points last week, its first hike since 2023. U.S. annual inflation held at 3.4% in August, with gasoline up 3.9% for the month and accounting for more than a third of the overall price increase. At McDonald's Investor Day, Kempczinski said industry traffic growth in the company's wholly owned markets will be flat while inflation remains elevated, adding that the winners will be companies that create more demand and deliver it more efficiently. The national average for gasoline stood at $4.4744 a gallon Wednesday, up from $4.0986 a month ago and $3.1719 a year ago, according to AAA, while diesel hit a high of $6.5276 a gallon Tuesday. Investor Peter Schiff questioned the divergence in a post on X, asking, "Who do you believe?"

Impact on assets 3

Consumer Discretionary▼ · 1 stocks
McDonald’s Corporation
MCD
▼ NegativePricingrelevance

McDonald's CEO warns elevated inflation and flat industry traffic will persist for years, pressuring the company's costs and demand.

Others▲ · 2 stocks
％Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

Fed Chair Warsh reaffirmed 2% as a firm fixed target and the Fed hiked rates 25bp, pushing the policy rate/yield higher.

Off-coverage companies 1

American Automobile Association (AAA)Private± Mixed
relevance

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