According to a survey conducted by two Federal Reserve banks and Duke University, optimism levels among chief financial officers declined in the first quarter due to growing concerns over tariffs and uncertainty. The optimism index, which measures sentiment on a scale of 0 to 100, dropped from 66 at the end of the previous year to 62.1 in the current quarter. The survey reflects the views of approximately 400 CFOs who play a crucial role in corporate decision-making related to spending, investment, and pricing.

While optimism in the construction sector saw a slight increase from 66.6 to 68, sentiment among CFOs in manufacturing, a sector that Trump has pledged to support through import taxes, decreased from 66.6 to 61.6. The decline in optimism appears to be linked to mounting worries about the potential impact of tariffs and the administration's trade policies. CFOs are now projecting slower growth rates and higher price levels compared to the end of the previous year.

The CFO survey findings are in line with a drop in consumer sentiment as reported by the Conference Board, which hit a four-year low in March. The concerns expressed by CFOs regarding tariffs and trade policies have resulted in lower expectations for GDP growth, revenue, and employment growth, as well as higher price expectations. Sonya Ravindranath Waddell, an economist with the Federal Reserve Bank of Richmond, highlighted the significant impact of uncertainty and trade policy on the sentiments of CFOs.