• Risk of recession remains
• Company still in hiring mode
Inflationary pressure remains high: While the US inflation rate was last at 8.3 percent, it reached euro zone an all-time high of 10 percent. The currency watchdogs are resisting this development, have ended their low-interest policy and, in some cases, raised key interest rates in large steps. But also a significant tightening of the monetary policy has not yet been able to stop the rise in consumer prices – and if financial experts have their way, this trend should not be broken in the near future either.
Experts in CNBC poll not very optimistic
That’s according to the quarterly CFO Council Survey, a survey of finance professionals conducted by CNBC. 21 CFOs were surveyed as part of the most recent survey. The survey is thus considered a kind of sample of the current prospects among top finance executives. Conducted between September 12 and September 27, 44 percent of respondents worked for Fortune 500 companies, and half of those respondents worked for a Fortune 100 company. The results of the survey do not give reason to hope that inflation will ease anytime soon.
57 percent of the managers surveyed were convinced that inflation had not yet peaked. More than a quarter of those surveyed consider inflation to be the biggest external risk factor for their own company.
recession ahead?
The monetary policy of the currency guardians is a tightrope walk: interest rate hikes are considered one of the most effective means of combating inflation, but at the same time the ECB, Fed & Co. risk stalling the economic engine. Fed Chairman Powell stressed at a press conference after the last Fed meeting that the monetary authorities themselves are also worried about a recession: restoring price stability with only a slight fall or rise in unemployment and a soft landing is a major challenge. “…nobody knows if this process will lead to a recession and if so, how significant that recession would be,” the US Treasury Secretary said.
This concern is also reflected in CNBC’s CFO Survey: almost half (48 percent) of the CFOs surveyed said they expect a recession in the first half of 2023. Around 19 percent of the financial experts are already expecting a recession for the fourth quarter, and another 19 percent even see the US economy in the midst of a decline in economic activity.
help from the labor market
Powell recently stressed that the risk of a recession depends on how quickly wage and price inflation pressures ease, “on whether expectations remain anchored and whether we also get more workers, which would also help.” At least on the latter point, respondents to the CNBC poll seem confident. Companies continue to hire, with 57 percent of CFOs saying they expect to increase headcount over the next year. Less than 10 percent expect staff cuts.
Overall, the pundits behind the Fed’s policy. 52 percent of the CFOs surveyed consider the efforts of the US Federal Reserve to be “reasonable”, 19 percent rate them as “good”. Meanwhile, 29 percent consider the measures taken by monetary authorities to be inadequate.
Editorial office finanzen.net
Image sources: Immersion Imagery / Shutterstock.com, B Calkins / Shutterstock.com