CEO confidence has fallen to its lowest level since the Great Recession as central banks scramble to tame decades-high inflation, according to the results of a major survey.
98% of CEOs in the US say they are preparing for a recession in the next 12 to 18 months, According to the quarterly survey From the Business Leaders Conference Board was released on Thursday. The number rose even higher, to 99%, for CEOs in Europe.
“Chief executives are now bracing for the near-inevitability of recessions in both the United States and Europe,” said Roger W. Ferguson Jr., Conference Board Secretary and former Vice Chairman of the Federal Reserve. “While the vast majority still expect the US recession to be short and shallow, about 7 in 10 believe the EU will enter a deep recession with serious global repercussions.”
Business chiefs received more bad news this week after the latest consumer price index showed inflation rose higher than expected at 8.2% in September. The reading confirmed the view that the Fed will continue to tighten monetary policy sharply despite concerns that its actions will lead to a prolonged recession.
Among the CEOs surveyed, only 5% felt economic conditions would improve over the next six months. Meanwhile, 81% said the economic outlook for the fourth quarter is worse than it was in the previous quarter.
About 85% of CEOs expect the US recession to be short and superficial, while 13% expect a deeper slowdown with “material global repercussions.”
When asked to identify the biggest global challenge their business currently faces, 34% of CEOs cited political and governmental instability, 17% cited energy access and security and 15% said the ongoing Russian-Ukrainian war.
Even before the latest inflation data came out, JPMorgan Chase CEO Jamie Dimon warned The global economy has faced a series of headwinds that will lead to a recession next year, including higher interest rates and inflation.
“These are very serious things that I think are likely to push the United States and the world — I mean, Europe is already in recession — and potentially put the United States into some kind of recession six to nine months from now,” Damon told CNBC.
Last month, FedEx CEO Raj Subramaniam sparked a sell-off in the market when he referred to a The global recession was already underway.
Executives and investors will gain a better sense of the Fed’s policy path when officials hold their next two-day meeting on November 1-2. The Fed is widely expected to raise the benchmark interest rate by three-quarters of a percentage point for the fourth consecutive meeting.
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