Investment Grade Credit
Companies that have survived by passing inflation onto consumers may be hitting a wall of tolerance. The impact on their credit ratings is now unfolding.
Whilst many companies have been able to pass on input inflation to consumers, the question is how much pricing power still remains?
And more importantly, does their product demand curve exhibit sufficient inelasticity to sustain profitability and keep balance sheets strong.
The answer varies across industries, with potential credit rating downgrade risk potentially on the horizon.
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