Sign up for 10 Things in Politics newsletter for the biggest stories in politics & the economy.
The country is reopening and the economy is recovering from the pandemic, and while COVID-19 cases are down, prices for goods and services are on the rise. President Joe Biden's administration says this phenomenon, known as inflation, is not a cause for concern, but CEOs of major companies are warning that they'll probably keep raising prices.
The Bureau of Labor Statistics' monthly Consumer Price Index release showed that inflation in June was much higher than expected, with prices surging 0.9% over May, the highest month-over-month inflation rate since April 2008's 1.0% increase. It was fueled by big price increases for used cars, beef, and pork, and the government insists it should cool down soon.
Labor Secretary Marty Walsh told Insider in early July that he's not worried about it. "The one thing that we are not concerned about is … inflation. We're still in transition, so we're not concerned about that. So I think anytime we can push for higher wages — and the president's been very vocal on this — that's a good thing for people."
Increasingly, though, executives are saying that price increases are here to stay. Here's what they're saying:
JPMorgan Chase CEO Jamie Dimon said during an earnings call on July 13 that inflation "could be worse than people think."
"I think it'll be a little bit worse than what the Fed thinks," Dimon said. "I don't think it's only temporary."
In June, Insider reported that Dimon said the bank was stockpiling $500 billion in cash in anticipation of higher inflation, during which he expressed the same concerns with the nature of inflation, in that it will be more persistent than what people are saying.
JPMorgan did not immediately respond to Insider's request for comment.
Larry Fink, the CEO of investment management corporation BlackRock, reiterated Dimon's concerns on the nature of inflation in a CNBC interview on July 14.
"[Policymakers] are saying jobs are more important than consumerism," Fink said. "That is going to probably lead to systematically more inflation."
—Squawk Box (@SquawkCNBC) July 14, 2021
Biden has consistently touted job growth as a primary achievement of his administration so far, and Republican lawmakers have even cut off unemployment benefits early in an effort to incentivize people to return to work.
But Fink said that move takes the focus away from consumers, causing large-scale price increases.
"I'm hearing from every CEO that they have huge price increases, and they're passing them on across the board, here in the United States and in Europe," Fink said.
BlackRock declined Insider's request for comment.
To help counter the effects of inflation, some business leaders are explicitly saying they're raising prices for their goods on consumers. PepsiCo's CFO Hugh Johnston is one of them.
"Is there somewhat more inflationary pressures out there? There is," Johnston said on an earnings call on July 13. "Are we going to be pricing to deal with it? We certainly are."
The CEO of industrial supplies company Holden Lewis echoed Johnston on an earnings call the same day, saying that "based on what cost is doing," the company will have to increase prices on consumers.
Lewis said, though, that a previous price increase the company made was received "fairly well," suggesting consumers might not be discouraged by increased prices.
Pepsi did not immediately respond to Insider's request for comment.