CFOs Cite Monetary Policy as Top Worry in Fed Survey — SkimNews
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- CFOs expect to raise prices an average of 5.3% this year and 4.5% next year, up from 3.6% projected at the start of the year, according to a quarterly Federal Reserve survey of roughly 500 firms.
- Monetary policy replaced inflation as the top concern for about 20% of surveyed finance chiefs, up from less than 15% in the prior quarter, even as inflation dropped in their ranking.
- The survey, conducted Aug. 17 to Sept. 4 by the Richmond Fed, Atlanta Fed and Duke's Fuqua School of Business, preceded the Fed's recent quarter-point rate hike.
- Small firms are taking the heaviest hit, with roughly one in five saying financing constraints are blocking expansion or making costs hard to cover, according to Richmond Fed economist Sonya Waddell.
- Among firms not planning to invest, about 42% cited unfavorable financing or a need to preserve cash, up from 32% six months earlier, with firms overall anticipating less capital investment in the next six months.
Why it matters: Smaller, financially constrained businesses are the clearest losers: roughly one in five say financing constraints are already blocking expansion or squeezing costs, and 42% of non-investing firms cite financing trouble, up from 32% six months ago. Larger CFOs still voice broad economic optimism, but the gap between them and small firms is widening as the Fed tightens.
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