Fed Survey: Tariffs Continue to Plague Businesses, Expect 4% Inflation Next Year

On December 17, a joint survey by the Federal Reserve Banks of Richmond and Atlanta and Duke University’s Fuqua School of Business revealed that U.S. corporate chief financial officers (CFOs) still rank tariffs as a top concern, with an average expectation of a roughly 4% price increase next year. This finding could amplify the Federal Reserve’s worries about current price pressures—pressures that may hinder its ability to quickly hit the 2% inflation target. Fielded between November 11 and December 1, the survey included 548 CFO respondents. Results showed diminished confidence in both their own companies and the broader U.S. economy: the U.S. overall economic optimism index dropped from 62.9 (out of 100) in the third quarter to 60.2, falling below the recent peak of 66 reached at the end of 2024 following President Trump’s re-election. Overall, respondents project moderate growth for employment and the economy in 2026: the median forecast for 2026 job growth is 1.7% (consistent with recent surveys), while the estimated annual economic growth rate is around 1.9%. Fewer than half (40%) of companies said they are hiring for new positions—slightly below the 20% of firms that are not hiring at all—with roughly 9% of companies expecting layoffs. (via Jin10)