Good morning, CFOs. A rift opens among Fed officials about whether tariffs warrant holding rates steady; private-equity investors target ‘mid-major’ accounting firms; and Krispy Kreme and McDonald’s end their partnership.

Federal Reserve Chair Jerome Powell told lawmakers on Tuesday that recent economic data would have likely justified continuing to lower interest rates if not for concerns that higher tariffs might derail the central bank’s yearslong fight to defeat inflation.

Powell said little to tee up a rate cut next month without explicitly ruling one out. But his answers to lawmaker queries suggested it was more likely officials would wait until at least their September meeting to see if tariff-driven price increases are milder than expected before resuming rate cuts.

“If it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later, but I wouldn’t want to point to a particular meeting,” Powell said at a House Financial Services Committee hearing.

Officials broadly expect tariffs to lead price growth to pick up this summer, interrupting an uneven but broad-based inflation slowdown over the past two years. “We do expect [inflation] to move [up] in the summer and if we see it not happening, we will learn from that,” Powell said.

• Survey Shows U.S. Consumer Confidence Worsened in June
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📆 Earnings

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📈 Economic Indicators

• The Census Bureau reports new home sales for May.

Roughly two dozen of the 100 largest U.S. accounting firms have either sold an ownership stake to private-equity investors or been acquired by a firm that has done so since 2021. Investors generally aim to accelerate revenue growth by helping their targets buy up smaller accounting practices and ramp up offshoring. In some cases, investors pick up small accounting firms and combine them in a practice known as a rollup.

Allan Koltin, chief executive of Koltin Consulting Group and adviser on many of these deals, talked to CFO Journal about his outlook for accounting mergers and acquisitions. Edited excerpts follow.

WSJ: What type of accounting firms will be acquired next by private equity?

Koltin: In the next two to four years, firms with $100 million to $500 million in annual revenue will either have a significant jump, or they may be the tuck-ins to the largest firms out there. We call these firms the mid-majors. As there are fewer M&A opportunities now compared to 2021, they’re going to do the math and say, “Hey, we could go acquire one $400 million firm overnight or we could go acquire 40 $10 million firms with 40 different cultures.” I could see the mid-majors selling to a larger accounting firm at a whopper price three to five years from now, when their private-equity partner decides to exit.

WSJ: What will come of the accounting rollups?

Koltin: If you combined the revenues of the five largest roll-ups into one, they would be about $1.5 billion and a top 12 accounting firm. No one knows the answer of where those are going to land. They're not going to go into a larger accounting firm because they had that option, and they said they wanted to go with a rollup because they have more autonomy. They could keep their brand, culture and software for a longer period of time before having to integrate.

WSJ: There’s only one publicly traded accounting services provider in the U.S., CBIZ. After two cycles of private-equity ownership, will many accounting firms go public?

Koltin: I would guess that within five years, we'll have five publicly traded CPA firms, and within eight years, we'll have 10. There’s going to be an exponential increase in the number of public accounting firms.

WSJ: How much debt have accounting firms taken on as part of these deals?

Koltin: Most of them have had a leverage ratio [of debt to earnings before interest, taxes, depreciation and amortization] of three to four times. I don’t believe any deals done to-date have had an excessive amount of debt. It's a product of the conservativeness of accounting firms.

—Mark Maurer

Federal investigators said that Boeing’s flawed manufacturing processes and inadequate regulatory oversight were among the factors leading to a door plug flying off a Boeing 737 MAX plane last year.

The National Transportation Safety Board is holding a public meeting Tuesday to share the findings of its investigation into why the door plug flew off the Boeing 737 MAX plane during an Alaska Airlines flight on Jan. 5, 2024.

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🎧 New to our WSJ podcast series: Listen here.

Corporate America’s Attempt to Rebrand DEI Programs

Just a few years after they trumpeted their DEI efforts, companies are now backtracking and trying to hide these programs. Wall Street Journal On the Clock columnist Callum Borchers joins host Julia Carpenter to talk about this reversal and what it means for employees and job hunters.

Pure Storage, the Santa Clara, Calif.-based data-storage company, has hired Tarek Robbiati as its new CFO. Pure Storage said Robbiati has more than 25 years of financial and leadership experience in the technology sector, including stints as chief executive of RingCentral and as finance chief at Hewlett Packard Enterprise and Sprint. Pure Storage in late May said Kevan Krysler, who joined the company as chief financial officer in 2019, planned to leave after it named a successor.

—Colin Kellaher contributed to today’s Ledger.

The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.

Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.

You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.