CFOs Predict 58% Chance of US Recession by 2025, Citing Inflation and Reduced Spending

A recent survey of American chief financial officers (CFOs) has revealed a significant level of pessimism regarding the U.S. economy. According to the findings, more than half of the CFOs surveyed anticipate that the United States will enter an economic recession by the second half of 2025. Specifically, 58% of respondents predict that the downturn will occur during the third or fourth quarter of that year. This outlook stands in stark contrast to the projections made by the Federal Reserve, which expects the GDP growth rate to remain around 1.8% in 2025.

The survey also highlights a notable decline in corporate capital expenditure plans, which have reached their lowest point in three years. This reduction in spending reflects the cautious approach that businesses are taking in response to the anticipated economic challenges. Additionally, 72% of the surveyed CFOs identified persistent inflation as the primary risk factor, indicating the significant impact that inflationary pressures are having on business operations and strategic planning.

Jeremy Barnum, the CFO of JPMorgan Chase, commented on the survey results, stating that cost pressures are eroding corporate profit margins and that there has been a continuous decline in manufacturing orders. This sentiment is echoed by many CFOs who are grappling with the dual challenges of reduced capital expenditure and persistent inflation. The banking sector's tightening of credit standards is further exacerbating the financial pressures faced by businesses, making it more difficult for them to secure the funding they need to operate and grow.

The economic outlook for the United States is increasingly uncertain, with a majority of CFOs expressing concerns about the potential for a recession in the near future. The combination of reduced capital expenditure and persistent inflationary pressures is creating a challenging environment for businesses, which are already grappling with a range of economic headwinds. As the economy continues to face these challenges, it is likely that businesses will need to adapt their strategies to navigate the uncertain landscape and mitigate the risks associated with a potential recession.