Many economic forecasters and Wall Street people have made clear their views on inflation and Fed policy: the US economy and markets will worsen before they get better. The latest survey by the CNBC Committee of Chief Financial officers (CFO Council) shows that CFOs of many top companies agree with this view.

More than 40 per cent of CFOs ranked inflation as the number one external risk for their business, while nearly 1/4 (23 per cent) of CFOs cited Fed policy as the biggest risk factor, while another 14 per cent cited the conflict between Russia and Ukraine as the biggest business risk.

CFOs do not all agree that the Fed will eventually be unable to control inflation. Slightly more than half (54%) said they were confident in the Fed, but that was not enough to change their view of the current state of the economy and the direction of policy decisions: a recession.

Most (77%) of the chief financial officers surveyed said the recession would occur in the first half of 2023. No CFO predicts a recession before the second half of next year, and no CFO thinks the economy will avoid a recession.

Forty-one per cent of CFOs say the yield on 10-year Treasuries has doubled this year to about 3 per cent and is expected to reach 4 per cent by the end of 2022. The same percentage of CFOs expect a 10-year yield of no more than 3.49 per cent by the end of the year. But some worry that interest rates will rise even faster, with some on the committee predicting that 10-year rates will rise above 4 per cent by the end of the year.

The growth prospects for the US economy and the global economy are bleak. The GDPNow tracker of the Federal Reserve Bank of Atlanta (Atlanta Federal Reserve) predicts that the US economy will experience negative growth for the second consecutive quarter, which is in line with the classic definition of recession. The World Bank (World Bank) has just cut its forecast for global economic growth and warned that there could be a period of stagflation like the 1970s, President David Malpass said. "for many countries, a recession will be inevitable. The Organization for Economic Cooperation and Development (OECD) has also lowered its forecast for global economic growth this year.

The survey shows that as inflation and interest rates rise, the economic outlook is affecting the CFO's view of the next phase of the stock market: the stock market will go lower. Most CFOs (77 per cent) expect the Dow Jones Industrial average (Dow Jones Industrial Average) to fall below 30, 000 before hitting a new high, meaning it will be down more than 18 per cent from its current level. More than half (55 per cent) of CFOs said: the energy sector will be the fastest growing sector of all sectors of the economy in the next six months.

But a key point made by chief financial officers is that many companies are making plans to transcend short-term headwinds. In the survey results, there was a tug-of-war between the deteriorating outlook and many companies showing no signs of cutting spending or hiring. While there has been news in the tech industry of saving money, slowing or freezing new hires, or even canceling existing job offers, CFO board companies have not taken action.

CFO (36 per cent) said it would increase spending in the coming year, twice as much as reducing spending (18 per cent), while nearly half (46 per cent) of CFO said they would at least maintain the current level of spending. In addition, the company is still hiring, with more than half (54%) saying the number of employees will increase in the next 12 months. Only 18% of people expect layoffs.