That’s what Stephen Philipson, vice chair and head of wealth, corporate, commercial, and institutional banking at U.S. Bank, told me he’s hearing from finance chiefs. “Our CFO clients are cautious, but they’re not standing still.” Overall, CFOs are focused on optimizing liquidity, managing risk, and maintaining optionality in the current environment, he said.

“We’re seeing solid financing demand from companies for both upcoming liquidity needs and long-term growth drivers,” Philipson explained. In addition, there’s a noticeable uptick in working capital finance, which reflects a proactive stance on cash flow management.

Research points to trade policy and tariffs remaining a top concern for CFOs. But Philipson said much of their cautiousness is driven by three main issues: heightened anxiety around the tariffs, a weaker dollar, and rising working capital needs.

U.S.-based importers are facing higher costs due to the weakening dollar and new tariffs, prompting firms to seek more financing and unlock idle cash to meet rising working capital demands, he said.

Meanwhile, foreign exchange (FX) risk management is front and center. For example, he’s seeing more use of collars (an options strategy that protects against large losses) to hedge downside risk while preserving upside potential. “And many firms are shifting to pay foreign vendors in local currencies to meet supplier demands and reduce costs,” Philipson noted.

There’s also an uptick in receivables finance and supply chain finance usage. These tools help firms hold cash longer while enabling suppliers to get paid faster, he said.

“It’s been interesting to observe how middle-market firms are stepping up their risk-management efforts this year,” he said. Middle-market firms are increasingly looking to proactively mitigate risks like interest rates and FX, while large corporations—with robust treasury operations—continue to deploy hedging tools.

When asked about the M&A outlook, Philipson said momentum is building as we move into the second half of the year. “The bank loan and bond markets are offering attractive conditions, with credit spreads near historical tights,” he said. This indicates that investors see little extra risk in corporate debt, keeping borrowing costs low for companies.

“We’re seeing more mid-tier deals—larger than tuck-ins but not fully transformational—as companies grow more comfortable with policy and market dynamics,” Philipson said.

He continued, “We expect M&A activity to continue picking up as companies get increasingly comfortable with ‘certainty around continued uncertainty’—the idea that macro headlines are likely to persist and must be part of the calculus around strategic decisions.”

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Matt Puckett was appointed CFO of Ibotta, Inc. (NYSE: IBTA), a digital promotions network, effective Aug. 25. Most recently, Puckett served as CFO of VF Corporation, a global leader in branded lifestyle apparel and footwear. Over his 23-year tenure at VF, he held multiple operating CFO roles, including a four-year international assignment in Switzerland overseeing finance across Europe and Asia. As enterprise CFO, Puckett led a global finance team. Puckett will replace Valarie Sheppard, who has served as Ibotta’s interim CFO since March 14. Sheppard will continue to serve on the company’s board.

 Chris Pudenz was named CFO of Juanita's Foods, effective immediately.  Pudenz brings over three decades of senior financial leadership. He previously served in CFO roles at Tetrad Corporation, Marco Technologies, Milk Specialties, and ABRA Auto Body & Glass, among others. Pudenz also held financial leadership roles at ConAgra Foods, AMCON Distributing, and Price Waterhouse.

Big Deal

S&P Global Market Intelligence data shows that global private equity entries dropped in July, as U.S. tariffs and a challenging macroeconomic outlook weighed on deal activity.

Private equity and venture capital entries totaled $52.59 billion worldwide in July, a decline of nearly 7% from $56.44 billion in June and over 29% below the $74.47 billion posted in July 2024, according to the findings. The number of deals also fell, with 911 transactions recorded globally in July, compared to 1,103 in June and 1,232 in July last year.

The technology, media, and telecommunications sector led private equity- and venture capital-backed activity in July, accounting for 34% of total deal value. The industrial sector ranked second with 25%, while the financial and health care sectors each contributed 13% to the aggregate.

Going deeper

"One FOMC dissenter might have just called out the Fed for its shifting base interest-rate policy" is a new Fortune report by Eleanor Pringle.

From the report: "Federal Open Market Committee (FOMC) member Michelle Bowman has urged consistency in interest rate policy, following questions about why the FOMC cut rates in late 2024 but is holding steady now despite similar levels of inflation and unemployment data. Citing sharp downward revisions to U.S. job growth, Bowman reiterated her forecast for three cuts this year while warning that declining data reliability complicates policymaking." You can read more here. 

Overheard

"In 2035, that graduating college student, if they still go to college at all, could very well be leaving on a mission to explore the solar system on a spaceship in some completely new, exciting, super well-paid, super interesting job."

—OpenAI CEO Sam Altman said in a recent interview with video journalist Cleo Abram. Though it’s unclear how widespread space exploration will expand in the coming years, aerospace engineers are growing faster than the national average of all jobs, Fortune reported.