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CFOs have a bigger fear than a recession right now

August 29, 2022, 10:09 AM UTC

Good morning.

CFOs of major companies in North America are far more worried about inflation than recession. That’s the finding of Deloitte’s quarterly CFO Signals report, out this morning. (CEO Daily got an early look.) Asked if they were more concerned about “recession” or “persistent inflation,” some 73% chose the second option, while only 27% chose the first.

That aligns them with the comments made Friday by Fed Chair Jerome Powell at the Fed’s annual Jackson Hole conference. It was at that conference a year ago when Powell—mistakenly—called inflation “transitory.” But this year, he was unwaveringly hawkish, noting that “high inflation has continued to spread through the economy,” saying that “restoring price stability will take some time,” and even quoting former Fed chief Paul Volcker, who battled inflation in the 1970s. That caused the market to plummet.

Powell continued to say that he doesn’t think a recession is inevitable, but he noted that fighting inflation will require “a sustained period of below-trend growth.” The clear message: The Fed has significantly more interest rate increases in store, and no intention of backing off.  

Among the CFOs, 46% expect the economy to be in recession by next year, and another 39% expect a period of stagflation. In response to changing economic conditions, they said they are closely managing operating expenses and controlling headcount. Despite the slowing economy, CFOs continue to overwhelmingly cite the battle for attracting and retaining talent as the top internal risk facing their companies.

For deeper dives into who’s getting hit hardest by inflation, check out Will Daniel’s story here analyzing the latest news from retailers and Alicia Adamczyk’s story here on why Gen Xers may be hurting most.

Other news below. And thanks to those who sent their encouragement for my participation in the annual “Hood to Coast” relay race in Oregon this weekend. I survived, and am back on the job, sore knees and all.

Alan Murray


Fossilized Musk

Elon Musk is pro fossil fuels in the short term: “Realistically I think we need to use oil and gas in the short term, because otherwise civilization will crumble.” The Tesla boss was speaking on the sidelines of a Norwegian energy conference. Reuters

Energy solidarity

Norway is under fire from its neighbors over its plans for electricity export cuts, which are intended to increase its own security of supply. Grid operators in Denmark, Finland, and Sweden say the move would be “very selfish” and would play into the hands of Russian President Vladimir Putin, whose invasion of Ukraine is largely behind the current European energy crisis. Financial Times

Economic output

While gross domestic product (GDP) suggests the U.S. might be in recession, the alternative metric of gross domestic income (GDI) points to continued expansion. Taking both into account, we may “just” be looking at a stalling economy. Wall Street Journal


Trademark filings hint at what Apple will name its long-awaited AR/VR headset, by Bloomberg

China’s Gen Z wants to ‘lie flat’ and buy local. U.S. brands like Marriott are deploying out-of-the-box strategies to reach them, by Grady McGregor

Goldman Sachs ‘delisting barometer’ says there’s still a 50% chance U.S. exchanges expel Chinese stocks after audit deal, by Bloomberg

NASA moon rocket on track for launch despite lightning hits: ‘Clearly, the system worked as designed,’ by Associated Press

Revised: Odds of falling home prices in your local housing market, as told by one interactive map, by Lance Lambert

This edition of CEO Daily was edited by David Meyer.

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