CFOs are dialing down growth expectations as trade policy volatility weighs heavily on financial strategy and decision-making. According to the latest CNBC CFO Council survey, 60% of finance leaders expect a recession by year-end, while another 15% believe it will hit in 2026. The shift in sentiment is striking. Just one quarter ago, only 7% forecasted a recession for 2025. The key driver behind this pivot is the White House’s aggressive stance on tariffs, especially in the auto and manufacturing sectors, which has overtaken inflation and consumer demand as the top external risk. Unpredictable messaging from the administration continues to complicate capital planning. A staggering 95% of CFOs say policy uncertainty is directly impacting business decisions. Capex projections have softened, with only 35% expecting to increase spending, 45% maintaining current levels, and 20% planning reductions.
Inflation expectations are also rising, driven by fears that tariffs will elevate input costs. Ninety percent of CFOs foresee renewed inflationary pressures, and 50% believe the Federal Reserve won’t reach its 2% inflation target until late 2026 or beyond. Treasury yields, meanwhile, are expected to remain elevated, with 65% of CFOs predicting a 4%–5% range by the end of the year. The uncertainty is so widespread that CFOs couldn’t even identify a sector with clear near-term growth potential. For the first time in the survey’s history, “don’t know” led the responses to the question of sector outlook. Still, many finance leaders express confidence in their industries, even as broader market signals remain mixed. Amid this environment, CFOs must prioritize liquidity, stay flexible with capital deployment, and adopt real-time scenario models to preserve stability and margin. With market signals clouded and policy risk rising, CFOs should focus on cash visibility, revisit cost structures, and adopt dynamic forecasting to stay ahead of potential disruption.
