As central banks move to quell 40-year high inflation, CEO confidence is at its lowest point since the Great Recession, according to a quarterly poll of business leaders conducted by the Conference Board.
According to the survey, released Thursday, an overwhelming majority of 98% of U.S.-based CEOs say they are planning for an economic recession over the next 12-18 months. For CEOs based in Europe, that figure increased to 99%.
"CEOs are now preparing for near-inevitable recessions in both the U.S. and Europe," Roger W. Ferguson Jr., a Conference Board trustee and former Fed vice chair, told the New York Post. "While the vast majority still expect the U.S. recession to be short and shallow, nearly 7 in 10 believe the EU will enter a deep recession with serious global spillovers."
This week, more bad news for executives came in the form of the latest Consumer Price Index, which revealed that inflation hit 8.2% in September. The measure supported the Federal Reserve's aggressive monetary policy, despite concerns that its actions will cause a lengthy recession.
Just 5% of the survey's respondents felt economic conditions will improve over the next six months, while 81% said the outlook for the fourth quarter is worse than it was in the previous quarter.
Around 85% of CEOs anticipate the U.S. recession will be brief and shallow, versus the 13% who expect a more significant downturn with "material global spillover."
Naming the biggest global challenge to their businesses, 34% of CEOs said political and government instability, 17% said energy access and security and 15% said the ongoing Russian invasion of Ukraine.
Earlier this week, JPMorgan Chase CEO Jamie Dimon warned that a mix of headwinds would likely tip the U.S. and global economy into recession next year.
"These are very, very serious things which I think are likely to push the U.S. and the world — I mean, Europe is already in recession — and they're likely to put the U.S. in some kind of recession six to nine months from now," Dimon told CNBC.
FedEx CEO Raj Subramaniam shook the market last month when he indicated the economy was headed for a worldwide recession.
Investors and CEOs will get a better idea of the direction the Fed's policy will take when officials hold their next meeting on Nov. 1-2. The financial institution is widely expected to raise its benchmark rate by three-quarters of a percentage point for the fourth meeting in a row.
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