The financial landscape heading into 2024 paints a complex picture of persistent inflation pressures, according to America’s financial decision-makers. Recent data from the Duke CFO Global Business Outlook survey reveals corporate finance chiefs anticipate raising prices by approximately 4% in the coming year, signaling that the battle against inflation remains far from won.
This projection comes as the Federal Reserve maintains its cautious stance on monetary policy, with markets anxiously awaiting signals about potential interest rate cuts. While headline inflation has moderated from its peak, this sustained pricing pressure from businesses suggests underlying economic tensions continue to simmer beneath the surface.
“What we’re seeing is a disconnect between the Fed’s target and the reality on the ground at major corporations,” says Catherine Miletti, senior economist at Meridian Research Institute. “When CFOs plan for 4% price increases, that’s double the Fed’s 2% inflation target, indicating businesses still feel empowered to pass costs forward.”
The quarterly survey, which collected responses from 309 finance executives in November, serves as a critical barometer of business sentiment. Notably, 63% of surveyed CFOs reported that their companies have already increased prices during 2023, reflecting ongoing adjustment to cost pressures that have defined the post-pandemic economic environment.
The persistence of expected price hikes contradicts some analysts’ hopes for rapid disinflation in 2024. Recent Consumer Price Index data showed inflation cooling to 3.2% in October year-over-year, down significantly from the 9.1% peak reached in June 2022, but the survey suggests businesses remain primed to push prices higher.
Corporate pricing power appears particularly resilient in service sectors, where labor costs continue to drive overhead expenses. Manufacturing CFOs, meanwhile, express growing concern about potential trade disruptions, with tariff policies ranking as a top worry heading into an election year.
“The tariff question looms large over corporate planning,” explains Marcus Jensen, former Treasury Department economist now with Global Economic Partners. “Companies are building buffer mechanisms into their pricing models to account for potential trade policy shifts, regardless of election outcomes.”
Significantly, this pricing stance comes despite growing evidence of consumer resistance. Retail sales data shows discretionary spending has moderated in recent months, with consumers becoming increasingly price-sensitive across multiple categories. This creates a potential collision course between corporate price aspirations and consumer willingness to absorb higher costs.
Federal Reserve officials have repeatedly emphasized their commitment to the 2% inflation target, with Chairman Powell recently noting that the central bank needs to see “more good data” before considering a pivot in monetary policy. The CFO survey suggests businesses are planning around a higher inflationary environment than policymakers target, potentially complicating the Fed’s efforts.
Regional variations also emerged in the survey data, with companies in the South and Midwest projecting steeper price increases than their coastal counterparts. This geographic disparity likely reflects differences in labor market tightness, supply chain configurations, and industry concentration across regions.
“We’ve always seen pricing dynamics play out differently across the American economic landscape,” notes Eliza Washington, chief economist at Atlantic Capital Advisors. “What’s striking now is how consistently upward these pressures remain across nearly all sectors, even as headline inflation numbers have moderated.”
Beyond inflation concerns, the survey highlights several other economic challenges on CFOs’ radar. Nearly 70% cited difficulty finding qualified workers for key positions, despite headlines about tech layoffs and cooling job markets in certain sectors. This suggests the labor market remains fundamentally tight for skilled positions, potentially maintaining upward pressure on wages and, consequently, prices.
Supply chain resilience has improved compared to pandemic-era disruptions, but remains a significant concern, particularly as geopolitical tensions threaten to disrupt global trade flows. Nearly half of surveyed CFOs indicated their companies have permanently altered supply chain strategies in response to recent years’ disruptions.
The financial outlook isn’t entirely pessimistic, however. Corporate cash positions remain strong by historical standards, with many companies reporting they’ve built reserves to weather potential economic turbulence. Capital investment plans, while cautious, continue to focus heavily on productivity-enhancing technologies that might eventually help moderate cost pressures.
“What we’re witnessing is a strategic recalibration rather than retrenchment,” says Thomas Reid, partner at Blackstone Advisory Group. “Companies are positioning for a higher-cost environment while simultaneously investing in technologies that could eventually tame those same cost pressures.”
For consumers and investors alike, the survey offers important insight into what lies ahead. Household budgets will likely face continued pressure across multiple spending categories, while investors must evaluate which companies possess genuine pricing power versus those that might face margin compression as they struggle to pass costs forward.
As we move deeper into 2024, the tension between corporate pricing intentions, consumer resistance, and Federal Reserve policy will shape economic outcomes across markets. The 4% price increase projection stands as an important signpost, suggesting inflation’s final mile toward normalization may prove the most challenging yet.
