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68% Of CEOs Say Fed Policy Is About To Trigger A Recession

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by Tyler Durden
Friday, May 20, 2022 - 01:40 AM

No matter how many Tom Lees and Marko Kolanovics CNBC wants to roll out to try and play things off like everything is fine, most CEOs - who spend their time in the real world instead of "analyzing" it - are bracing for a recession. 

In fact, "CEO confidence has tumbled to the weakest level since the beginning of the Covid-19 pandemic", a new report from CNN, citing The Conference Board, said this week.

CEO confidence is now negative for the first time during the economic expansion, the report notes. The C suite is bracing for a turndown as a result of Fed policy, the report notes. 

68% of CEOs expect that Fed policy is going to trigger a recession, according to a survey fielded between April 25 and May 9 which looked at the responses of 133 CEOs.

Despite this, only 11% of these CEOs are predicting a "hard landing". Most CEOs said they expect a "very short, mild" recession. We'll make sure to keep an eye on this figure as we progress further into 2022, especially if the Fed decides to hold course. 

Dana Peterson, The Conference Board's chief economist, said: "Businesses are being challenged on so many fronts right now and CEOs have elevated expectations of a recession."

61% of CEOs surveyed also said that economic conditions have worsened over the last 6 months. This compares to 35% who said the same in Q1. Only 14% of CEOs said they see "improving economic conditions". 

Mike Sommers, CEO of the American Petroleum Institute, commented: "Recessionary-concerns are real." He added that recessions often follow interest rate hikes. 

Despite this, there are some "economists" who continue to argue that recession isn't necessarily imminent. RSM chief economist Joe Brusuelas concluded: "Concerns about an immoderate near term recession are generally overblown. The Fed is attempting to thread the needle while wearing boxing gloves and a mouth guard which reduces its degrees of freedom to act without causing damage to the real economy."

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