By Howard Schneider
WASHINGTON (Reuters) -U.S. corporate finance chiefs say the confusion around trade policy that put a damper on the first half of the year has begun to lift, but that price increases are still in the pipeline and may accelerate next year, according to the latest Fed survey of chief financial officers.
The quarterly poll, a national sampling of 525 companies conducted by the Atlanta and Richmond Federal Reserve banks in conjunction with Duke University’s Fuqua School of Business, found that optimism among CFOs improved and uncertainty around policy fell in the third quarter of the year, a finding consistent with the Trump administration’s reaching final tariff rates for many of the goods and countries it had targeted.
While the administration’s rewriting of trade rules is not complete, with major court challenges still pending, CFOs dropped “uncertainty” from their top concerns.
During the first months of the Trump administration this year, confidence plummeted and markets were whipsawed by the launch of tariff and trade plans that included a massive round of proposed levies that were eventually rolled back but set an unpredictable tone. Companies put investment and hiring plans on hold in the interim, and firms and households even stockpiled imported goods to such a degree that it distorted economic growth data.
Tariffs remained the top issue cited by finance chiefs, trailed by inflation and monetary policy, but the share of respondents citing that as the most pressing concern fell to 30% from 40%.
As the final level of tariffs has become clear, finance executives are able to lay more precise plans for how to deal with them.
For firms more reliant on imports or in other ways exposed to tariffs, that has meant planning for price hikes, a fact that has registered with Federal Reserve officials reluctant to cut interest rates until it is clear how inflation will respond to the new import regime.
Price increase expectations actually fell slightly this year, Richmond Fed researcher Zach Edwards and Atlanta Fed survey director Daniel Weitz noted in an analysis of the survey. But they rose for next year, a fact that may buttress concerns among some policymakers that the full pass-through from tariffs to inflation may take months to understand.
“Compared to last quarter, firms are less uncertain about tariffs and are subsequently less worried about the most extreme outcomes manifesting,” and anticipate more modest price increases this year, they wrote. “Firms have yet to see the types of extreme impacts from tariffs that they expected and have thus softened their forecasts for price and cost growth slightly.”
Yet at the same time “firms importing inputs/supplies from abroad have steadily increased their expectations for unit cost and price growth in 2026,” they wrote. “This suggests that some of the modest reduction in unit cost and price growth expectations this year may instead reflect growth that will materialize next year … A reduction in uncertainty over tariffs should not be conflated with expectations for a meaningfully smaller impact of tariffs on firm costs or prices.”
Survey respondents said that tariffs have added as much as 30% to planned price increases, and continue to limit investment among companies most concerned about rising import costs.
(Reporting by Howard Schneider in Washington; Editing by Matthew Lewis)
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