CEO Confidence Slips as Two-Thirds Warn of Stagflation: Survey

A key measure of U.S. CEO confidence slipped further into negative territory in the fourth quarter, with nearly two-thirds of corporate leaders warning of stagflation ahead, according to a new survey by The Conference Board.

The Conference Board’s measure of CEO confidence, released on Oct. 16, fell to 48 in the fourth quarter of 2025, down from 49 in the prior quarter. The survey, fielded from Sept. 22 to Oct. 6, included 130 CEOs of major U.S. companies.

“CEO confidence weakened slightly in the fourth quarter, signaling continued caution among leaders of large firms,” Stephanie Guichard, a senior economist at The Conference Board, said in a statement. “Views of general economic conditions now versus six months ago remained slightly negative while CEO’s six-month expectations for the economy turned from neutral to pessimistic.”

About 64 percent of CEOs said they expect a mild economic slowdown combined with persistent inflation over the next 12 to 18 months—a scenario The Conference Board described as stagflation. Only 4 percent foresee a full recession.

By comparison, 22 percent see a balanced economy with trend growth and gradual reduction in inflationary pressures, while 10 percent see solid economic growth accompanied by a “notable” increase in inflation risk.

While CEOs no longer rank tariffs among their top risks, The Conference Board survey shows that trade policy remains a significant concern, occupying fifth spot on a list of 11 key risks facing industry, with geopolitical instability and cyber threats topping being the top fears. Although CEOs did not explicitly link tariffs to stagflation, the potential for renewed trade frictions has reemerged in the broader inflation debate—a concern echoed by Federal Reserve Chair Jerome Powell.

Powell, while speaking on Oct. 15 at a National Association for Business Economics (NABE) event in Philadelphia, said that tariff-related price increases may be passing through more slowly than expected, raising the risk that inflation could begin to look “more persistent” rather than a one-time adjustment. At the same time, he noted that labor demand has “declined quite sharply” and that the jobs market has “softened pretty considerably,” underscoring the Fed’s challenge of balancing rising prices with weakening employment—a mix often associated with stagflation.

Despite the gloomier macro-outlook, The Conference Board survey showed pockets of resilience in corporate planning. The share of CEOs expecting to increase capital spending rose sharply to 22 percent in the fourth quarter, up from 15 percent in the third, while fewer reported plans to cut investment. Workforce expectations also stabilized, with 32 percent of CEOs planning to expand headcounts and fewer anticipating layoffs for the first time since mid-2024.

“Despite slightly weaker confidence, businesses investment and hiring plans strengthened marginally,” Roger Ferguson, chair emeritus of The Conference Board, said in a statement.

Assessments of current business conditions remained cautious. Thirty-seven percent of CEOs said the economy had worsened over the past six months, up from 34 percent in the prior quarter. Twenty percent said the economy had improved, down from 22 percent in the third quarter. Looking ahead, 38 percent expect conditions to deteriorate further, up from 30 percent in the prior quarter. Twenty-four percent anticipate an uptick, down from 30 percent who expressed such a sentiment in the prior three-month period.

The Conference Board’s CEO survey findings align with growing unease among consumers, according to recent polls. Consumer confidence fell in September to its lowest level since April, and JPMorgan Chase CEO Jamie Dimon recently warned that markets may be underestimating the risk of a major correction, citing geopolitical tensions, fiscal imbalances, and lingering inflation.

The U.S. economy expanded at a 3.8 percent annual rate in the second quarter, exceeding forecasts, with the Federal Reserve Bank of Atlanta’s real-time gross domestic product (GDP) measure projecting a similar 3.8 percent pace of growth in the third quarter.

The economy contracted by 0.6 percent in the first quarter, mostly driven by a sharp drop in imports, which subtract from GDP calculations.