This year hasn’t been an easy one for business owners. With one headwind after another, it’s hard to decide whether the glass is half empty or half full. One minute you’re hopeful that the pandemic has become a thing of the past, and the next minute you’re trying to deal with drags on your supply chains, fears of recession and tough decisions about customers and the health of their balance sheets.
Fortunately, not all is doom and gloom. In fact, amid the disruption and uncertainty we’re all reading about, there are still a range of opportunities for sustaining your business’s growth in today’s economy. During a recent event, three Bank of America experts discussed this very topic, while offering innovative ideas for protecting your business and taking advantage of the current business climate.
The search for a tipping point: Keep your eye on the state of the economy
On the macro level, the most pressing question today is whether the Federal Reserve will be able to curb inflation without tipping the economy into recession, suggests Jonathan Kozy, managing director and senior macro strategy analyst for the Chief Investment Office at Bank of America.
Still, those business owners who find themselves beset by labor shortages and forced to offer higher wages are caught in the middle of those efforts. Customers, however, may be put off by sky-high gasoline prices, sticker shock at the grocery and rising mortgage rates – but they still have plenty of cash to spend.
Beyond U.S. borders, the Ukraine conflict is fueling inflation in Europe, and China’s zero COVID policy is suppressing growth. “Inflation here probably hasn’t peaked, and it’s likely to be above the Fed’s 2% target at the end of the year, which could lead to more rate hikes,” Kozy predicts. However, he sees signs that labor market pressures may ease soon, with slower employment growth and job openings coming down. “Our hope is that the Fed can engineer a soft landing.”