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Sept. 27, 2023

CFOs: Interest Rates Dampen 2023 Spending; Outlook for 2024 Brighter

Financial decision-makers ranked monetary policy as their top business concern, as higher interest rates have curtailed spending at approximately 40 percent of companies. The CFO outlook is brighter for 2024, however, with higher revenues and hiring expected next year, along with smaller increases in prices and input costs.

This is according to the third-quarter results of The CFO Survey, a collaboration of Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta that was fielded from August 21 to September 8.

For the past several quarters, CFOs ranked difficulty in hiring and retaining workers as their top business concern. This quarter, concerns about monetary policy jumped to the top, followed by labor quality and availability, inflation and weak demand. This is the first time in at least a decade of this survey that monetary policy concerns ranked so high.

About 40 percent of CFOs say that the current level of interest rates has caused their companies to pull back on capital and noncapital spending. The share of firms curtailing spending would grow closer to half if rates were to remain at their current level for another year. If rates were to increase another percentage point, half of the companies would dampen spending.

“Monetary policy appears to be further dampening business spending and hiring plans,” said John Graham, finance professor at Duke University’s Fuqua School of Business and the director of the survey. “Overall, the weak (but still positive) growth in 2023, followed by improved prospects in 2024, suggests that policymakers may yet pull off a soft landing for the U.S. economy.” 

Several economic indicators reflect a brighter outlook for 2024.

  • Respondents expect employment growth to increase to nearly 4 percent in 2024, up from about 1 percent this year.
  • Price and unit cost growth are both expected to temper in 2024, including the wage bill.
  • Revenues are expected to rebound from an average of 3 percent growth in 2023 to more than 6 percent in 2024.
  • CFOs assign a 19-percent chance of negative GDP growth over the next 12 months, down from 24 percent in last quarter’s survey.
  • The CFO Optimism Index improved slightly this quarter, compared with last quarter.

The CFO Survey is issued by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. The latest survey, as well as historical data and commentary, can be found at www.cfosurvey.org. Sign up to receive email notifications when new results are posted.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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