Is there a relationship between Inflation and Corporate Profits? I think so. But I do not know of anyone talking about the relationship, so I will. The point I want to make is that corporations control prices. They set prices. They are not just price-takers. Corporations will change prices with an eye on their profits. In the aggregate, we will see changes in inflation. I will also finish by saying that the Fed feels the Fed rate can rise because firms still have a large profit cushion with which to absorb a rate increase. Let’s set up the relationship between inflation and corporate profits. First, see corporate ... (full story)