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Former Kellogg CEO Carlos Gutierrez on concerns over rising inflation and the state of the economy.
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-- -- CEO and commerce secretary Carlos Gutierrez who says only government economists don't see inflation from -- -- -- morning.
It's alive and well conceived -- -- see you what do you make of this.
-- you know what happens is they'll say you know inflation -- 1% 2% there is no inflation -- -- gets convinced.
But if you're looking at your own PNL.
And you're looking at health -- growing 13%.
Government regulations adding to your PNL.
Wages are going up so you do have more inflation -- You know you know if you're.
That the profit part of the -- for now is getting some bang for that you know.
Chocolate price increasing buck but eventually people do balk at that don't you know we know -- what happens is it if you take prices up -- on.
You're eventually going to have to deal it back.
You gonna have to take the price down owner -- you guys do and I don't know either does it -- you make a portion and smaller.
The world we didn't do that god bless you but but you know it is it to a certain extent a sign of the strength from a -- that you can take prices -- When they deals is that -- secretary about the strength of the economy instead of them until.
Well I think that yet you know some brands deserve to go up because the input cost for going up and and consumers may -- kind of but that's what the cost -- -- -- -- It's 2% inflation is one thing that's headline inflation -- you see gasoline prices might -- up 2%.
And raw material prices commodity prices health care prices.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Quite a bit of a claimant -- and deservedly so you.
-- -- realizing what we're we're dealing with the same commodity price inflation you know votes grains also we're gonna have to -- prices dip at what point.
Does inflation then go from a threat to boom it's here.
Well I I it's a great question because -- it's better to have for business and for the economy a little bit of inflation and own place.
The problem is it's very difficult to say you know 12 point seven.
Because it gets away from -- before you know what two point seven is five.
And five become seven sold -- here's -- it becomes an issue secretary when.
Workers then say look we're paying a lot more for stuff we want to erase all excellent example we had a tight labor market.
Tough labor market cells are less inclined to do that so the answer is.
We have to be a little bit more open minded about immigration.
Because I was born but we're going to need workers were going to need people Wendy's clients as we need nurses we need.
All kinds of people believe it or not so those on the lower wrong.
It's field workers.
-- We need more than what we know it went engineers joining me -- what are I think you focus on the high end but it's the -- and you think that's exactly no no doubt about it over time we're not producing.
Eight labor forces be enough to grow our economy let me ask you very quickly and this notion.
That did the Fed recognizes what you recognized.
That inflation is very real but they know the jig is up with all of the sudden.
They have to address -- by raising interest rates because this is all about them holding on -- this fragile recovery well an aide told people look we're gonna keep them.
At this level for for a while now.
The problem is -- got to balance sheet worth about one point six trillion dollars whenever they from.
-- that back to banks and banks start to -- that and that creates its own cycle.
That's going to be tricky bet that that's gonna be the the Fed's exit plan and and that's -- Bernanke's.
Skills gonna have to come into play.
That's gonna show.
Where this whole thing can work or not secretary great singer again we -- thank you very much.
