CMW: The Corporate & Risk Operations Brief delivers weekly insight on how market shifts, operational decisions, and policy signals translate into real-world risk and execution pressure for corporate leaders.

CMW: The Corporate & Risk Operations Brief  is built for leaders navigating risk in real time.

Behind the Numbers: PCE Signals Inflation Isn’t Done Yet

by CMW: The Corporate & Risk Operations Brief Contributor

What’s Happening

The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures Price Index, rose 0.3% in January, with core prices climbing 0.4% for the month and 3.1% year-over-year. Meanwhile, U.S. economic growth slowed sharply, with fourth-quarter GDP revised down to 0.7%, even as consumer spending continued to rise modestly.

Why it matters

Sticky inflation alongside slowing growth creates a complicated policy backdrop for the Federal Reserve. While demand remains resilient, price pressures—especially in services—are running above the central bank’s target. This combination limits the Fed’s ability to ease monetary policy and raises concerns that interest rates could remain elevated longer than expected.

What’s the risk exposure

Businesses face a dual risk: persistent inflation increasing input and financing costs while slower growth weakens demand. Rising energy prices tied to geopolitical tensions add uncertainty across supply chains. Manufacturers, retailers, and logistics operators may see margin pressure as borrowing costs stay high and consumer purchasing power becomes less predictable.

What to watch next

Upcoming inflation readings, energy prices, and consumer spending data will shape the Fed’s policy outlook. Markets will closely monitor whether core PCE begins trending toward the Fed’s target. Additionally, durable goods orders, wage growth, and global energy developments could influence inflation expectations and determine when rate cuts become feasible.

Key Risks & Considerations

Sources

• Fourth-quarter GDP revised down to just 0.7% growth; January core inflation was 3.1%

• VIEW PCE inflation report meets expectations, GDP is soft; markets rally | Reuters

Fed Pause Signals Rising Cost and Demand Risks for Operators

by CMW: The Corporate & Risk Operations Brief Contributor

The Federal Reserve held rates steady again, but ongoing geopolitical tensions—especially the Iran conflict—are driving volatility that risk, operations, and supply chain leaders can’t ignore.

Rising oil and fuel costs are already pushing up transportation, production, and input expenses, with potential knock-on effects across sourcing and pricing strategies. At the same time, persistent inflation and slowing hiring signal softer demand ahead. This combination creates a dual challenge: managing margin pressure while avoiding excess inventory. Leaders should scenario-plan for prolonged cost volatility, reassess supplier resilience, and closely monitor demand signals as macro uncertainty intensifies.

Sources

• Federal Reserve Maintains Rates and Watches Risks From Iran War - The New York Times

Builder Confidence Edges Up, But Cost Pressures Persist

The National Association of Home Builders’ latest NAHB/Wells Fargo Housing Market Index rose slightly to 38 in March, signaling modest improvement in builder sentiment but continued contraction in housing market expectations. Readings below 50 indicate pessimism, reflecting persistent affordability constraints tied to high construction costs, limited land availability, and labor shortages. Builders are increasingly using incentives and modest price cuts to stimulate demand as buyers remain cautious amid mortgage-rate volatility and geopolitical uncertainty affecting inflation and energy prices. For risk and operations leaders, the data underscores continued pressure across construction supply chains, labor markets, and housing demand dynamics that could ripple through manufacturing, materials, and regional economic activity.

• U.S. Home Builder Sentiment Inches Higher But Affordability Concerns Persist - WSJ

• US home builder sentiment edges up in March -NAHB - AOL

Executive Quote

3-16-26 Newsletter.pdf

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