Fed/Duke Survey: CFO Optimism Drops on Tariffs

Optimism among company chief financial officers dropped in the first quarter as tariff risks and uncertainty began to cloud an outlook among business executives that had been buoyed by President Donald Trump's election victory, according to a survey by two Federal Reserve banks and Duke University.

On a scale of 0 to 100, average optimism among around 400 CFOs — key players in the corporate spending, investment and pricing decisions that can influence the direction of the economy — fell from a pandemic-era high 66 at the end of last year to 62.1 in the current quarter.

The index fell as low as 50.5 during a pandemic surge of inflation, but had risen to around 60 before jumping 6 points following Trump's election. Only one sector, construction, showed rising optimism since then, from 66.6 to 68.

Optimism among CFOs in manufacturing, the sector Trump has said he will help by taxing imports, fell from 66.6 to 61.6. The drop seemed tied to rising concerns about the uncertain impact of tariffs and Trump's efforts to rewire global trade. The CFOs now anticipate slower growth and higher prices than they did at the end of last year.

“Uncertainty and trade policy were clearly on the minds of CFOs,” said Sonya Ravindranath Waddell, vice president and economist with the Federal Reserve Bank of Richmond.

“Not only did almost one-third of respondents report concerns about tariffs, but those respondents had notably lower optimism, lower expectations for GDP growth, lower expectations for revenue and employment growth, and higher expectations for price growth in 2025.”

The CFO survey tracks a recent drop in a Conference Board survey of consumer sentiment, which fell in March to a four-year low with households fearing both recession and higher inflation.