US CFO Survey: "Economic Recession Coming in First Half of Next Year... Dow to Fall Below 30,000"

[Asia Economy New York=Special Correspondent Joselgina] A significant number of chief financial officers (CFOs) of major U.S. companies expect an economic recession in the first half of next year.

According to CNBC, a U.S. economic media outlet, on the 9th (local time), a recent survey was conducted targeting 22 CFOs of major companies belonging to the 'CNBC CFO Council.' As a result, 77% of respondents answered that they expect an economic recession to occur in the first half of 2023. None of the CFOs believed that the U.S. economy could avoid a recession.

Additionally, more than 40% of large company CFOs cited inflation as the biggest external risk. Inflation in the U.S. has recently remained at the highest level in 40 years. Following that, monetary policy by the central bank, the Federal Reserve (Fed) (23%), and concerns about the Russia-Ukraine war and supply chain issues (14%) were mentioned as major risks.

Furthermore, 41% of respondents predicted that the U.S. 10-year Treasury yield, currently hovering around 3%, will approach 4% by the end of this year.

These survey results attract attention as the Fed has begun to intensify its tightening measures to curb soaring inflation, raising concerns about economic slowdown, stagflation, and recession.

Earlier, the World Bank (WB) significantly lowered its global economic growth forecast for this year to 2.9% in a recently released report and warned of the possibility of stagflation, which means low growth combined with high inflation. Robert Shiller, a Nobel laureate in economics and professor at Yale University, also expressed concern in an interview with Bloomberg News the day before, stating that "the possibility of a U.S. recession is considerable" and that the probability of falling into a recession within the next two years is "over 50%."

In this survey, less than half of the CFOs expressed concerns that the Fed would fail to control inflation.

More than 77%, a majority, forecast that the Dow Jones Industrial Average on the New York Stock Exchange will fall below the 30,000 mark. This represents a drop of 9% from the current level and more than 18% from this year's peak. The energy sector was identified as the sector expected to show the most growth over the next six months.

However, CNBC noted that despite these concerns, many companies do not plan to reduce investment and employment. CFOs who said they would increase spending over the next year accounted for 36%, twice the 18% who said they would reduce spending. Additionally, 54% of respondents said they would increase employment over the next year, while only 18% said they would reduce their workforce.

This content was produced with the assistance of AI translation services.