As CFOs proceed to judge the implementation course of and market reactions to tariffs put in place by the Trump administration, finance chiefs in CNBC’s CFO Council made it evident through the management group’s most up-to-date CFO survey that they’re leaning towards pessimism in terms of financial outlook and viability for progress.
The report found that 75% of CFOs mentioned they’re pessimistic concerning the economic system, possible ensuing from economic uncertainty from government trade policy and forecasts of higher inflation by the Federal Reserve.
Dangers and progress expectations
With out shock, U.S. commerce coverage was the top-ranked concern amongst CFOs, adopted by inflation and client demand. These findings are just like the leads to the latest Duke-Fed CFO survey, which was revealed a day after the CNBC CFO survey. Each studies discover related instances that CFOs are involved about tariffs and their influence however are unable to strategize to resolve uncertainty as a result of the knowledge on influence and legitimacy just isn’t but out there.
When requested which sectors are ripe for progress over the following six months, 4 in ten (40%) CFOs mentioned they didn’t know, the commonest reply chosen. Vitality got here in second, netting 20% of the whole tally, with half that quantity (10%) saying each know-how and healthcare, leading to a tie for third-place expectations.
Surveyors additionally famous that not a single CFO labeled communications providers, client discretionary, actual property or utilities because the best-performing sector for Q2 and Q3.
For his or her financial outlook, 60% of CFOs mentioned they anticipate a recession within the second half of 2025. When requested concerning the severity of a recession within the subsequent two years, half (50%) mentioned it will be reasonable and 40% mentioned it will be gentle. Ten p.c mentioned there is no such thing as a likelihood a recession is going on within the subsequent two years.
Tariffs and the federal government’s influence
Although a majority (55%) of CFOs mentioned they’re unsure about tariffs as a result of they don’t know which of them will persist, there’s a near-even break up amongst those that have made up their thoughts on their influence. 1 / 4 (25%) mentioned they imagine tariffs won’t assist the economic system, and a fifth (20%) mentioned they are going to assist.
Almost all (95%) respondents mentioned that the present insurance policies in place by the Trump administration are affecting their skill to make enterprise selections. In response to the surveyors, they imagine CFOs really feel that President Donald Trump has been fulfilling his marketing campaign guarantees however discover his strategy “chaotic, disruptive and too excessive,” a much different sentiment than how some CFOs felt after his victory in This fall of final yr.
Judging the Fed
CFOs have blended emotions concerning the Fed’s dealing with of inflation. Almost a fifth (15%) mentioned the Fed is doing a superb job, however way more (45%) labeled the efficiency nearly as good.
Although solely 5% had been brazenly vital concerning the Fed’s efficiency, two-thirds (66%) mentioned they imagine the Fed continues to be a methods out from its 2% objective, forecasting it’ll hit that no before 2027. 1 / 4 of all CFOs (25%), although possible supportive of the Fed’s strategy as a result of aforementioned lack of critiques, surprisingly mentioned they’re not sure if the two% goal will ever be reached.
