Finance chiefs see US prices rising next year, tariffs still a top concern

WASHINGTON, Dec 17 (Reuters) – Company finance chiefs continue to cite tariffs as a top concern and on average see prices rising around 4% next year, according to a survey that may add to U.S. Federal Reserve concerns that current price pressures will keep it from reaching its 2% inflation target anytime soon.

The survey of 548 chief financial officers, conducted from November 11 to December 1 by the Federal Reserve banks of Richmond and Atlanta in conjunction with Duke University’s Fuqua School of Business, showed overall confidence dropping for both their own companies and for the U.S. economy as a whole. Its optimism index for the U.S. as a whole dipped to 60.2 on a scale of 100 from 62.9 in the third quarter and also below its recent high of 66 at the end of 2024 following President Donald Trump’s election to his current term.

The overall outlook is for both modest job and economic growth for 2026, with the median company expecting to boost employment by 1.7% in 2026, similar to recent surveys, and the economy expected to grow at about a 1.9% annual rate. Fewer than half of firms, at 40%, said they were hiring for new positions, while just under 20% said they were not hiring at all and about 9% said they anticipated layoffs.

Though tariff and trade risks have abated since the survey found record levels of concern in the second quarter of the year, when nearly 40% of respondents cited that as their most pressing issue, it still tops the list as finance chiefs anticipate significant price increases next year.

The average 4.2% expected rise in prices was just shy of the increase expected in unit costs; revenue growth on average was seen at close to 8%, slightly above the increase expected for this year.

In economic projections issued last week, Fed policymakers at the median anticipated inflation slowing in 2026 to within half a percentage point of the desired level.

But the expectations of CFOs in the Fed-sponsored survey are among the reference points that have caused some central bankers to worry that higher inflation, currently running nearly a percentage point above the Fed’s 2% target, may prove more persistent than expected.

In prior surveys, “we learned that CFOs expected the upward pressure from tariffs on prices to continue into 2026,” said John Graham, a Duke Fuqua School of Business finance professor and the academic director of the survey. “In this quarter’s survey, we find evidence of continued high price growth,” he said, with half of firms anticipating price hikes of 3.5% or more.

(Reporting by Howard Schneider; Editing by Andrea Ricci)