CEOs Are Increasingly Worried About Economic Downturn, Inflation, and Asset Bubble Bust

CEOs are increasingly worried about an economic downturn, inflation, and an asset bubble bust in the first quarter of 2026. According to the AlixPartners 2026 Disruption Index, 72% of CEOs report it is more difficult than last year to determine which disruptive forces to prioritize. The report, which surveyed 3,200 executives across 11 countries, highlights growing anxiety in leadership as uncertainty surges.

The World Economic Forum's latest Global Risks Report reinforces these concerns, with geo-economic confrontation ranking as the top immediate risk for 2026. The report emphasizes rising rivalries and geopolitical tensions as key threats to global economic stability. State-based armed conflict and social polarization followed closely as top concerns for the next two years.

Inflation and asset bubble risks have also moved up in the risk rankings. The WEF report notes that the risk of an economic downturn rose eight positions to No. 11, while inflation climbed eight spots to No. 21. Meanwhile, the potential for an asset bubble burst rose seven positions to No. 18. These trends reflect growing macroeconomic fragility as central banks navigate tight policy balances.

What Are Analysts Watching Next?

Analysts are closely monitoring the U.S. inflation data and the Federal Reserve's response. A recent report from Reuters highlighted President Donald Trump's demand for rate cuts in response to the latest inflation numbers. Meanwhile, Fed President Tom Barkin called the December inflation data "encouraging" but cautioned that the situation remains delicate. He emphasized that inflation is still above target and that the central bank needs to maintain its independence to avoid political pressure.

The political pressure on the Fed has spiked after the U.S. Department of Justice announced a criminal investigation into Chair Jerome Powell. JPMorgan Chase CEO Jamie Dimon warned that such interference could destabilize the central bank's ability to manage inflation. He argued that any erosion of the Fed's independence could lead to inflation expectations rising and a loss of economic stability.

Why Did This Happen?

The rising concerns among CEOs stem from macroeconomic instability and increased geopolitical tensions. The WEF report underscores that global power rivalries are reshaping economic landscapes, with supply chains and trade policies becoming more contentious. These developments have created a more fragmented global environment, increasing uncertainty for business leaders.

The AlixPartners report highlights that 45% of CEOs now fear losing their jobs, and 40% reported feeling more anxious than last year. Disruption is increasingly seen as the norm rather than an exception. Executives are struggling to balance immediate priorities with long-term strategic planning as the business environment continues to shift rapidly.

Inflation remains one of the top disruptors for companies, with half of all executives identifying it as a major challenge over the past year. The cost pressures have been exacerbated by AI-related workforce reorganization and the need for increased investment in automation.

How Did Markets React?

Markets have shown mixed reactions to the growing concerns. The latest CPI data, released by the Bureau of Labor Statistics, included more detailed figures than the previous month's truncated report. While the numbers did not immediately trigger a market sell-off, investors remained cautious. The S&P 500 and other major indices saw gains in early January 2026, but the trend was tempered by concerns over inflation and the Fed's policy stance.

The bond market reacted more dramatically. The yield curve flattened as investors priced in the likelihood of delayed rate cuts. The 10-year Treasury yield remained elevated, signaling continued uncertainty about future inflation. Analysts noted that the market expects more data before any policy adjustments are made.

Corporate bond issuance has also surged to record levels, with over $95 billion raised in the first full week of January. This reflects strong demand for high-quality bonds and a general sense of confidence in corporate balance sheets. However, some analysts caution that the sheer volume of deals could test market demand later in the year, leading to wider spreads.