Recession fears spike among CEOs, with 60% forecasting economic downturn

Odds of economic downturn growing as inflation rages, CEOs say

A majority of global CEOs think a recession is looming or already here, according to a new survey, reflecting an increasingly bleak economic outlook among business leaders as inflation rages.  

More than 60% of executives expect a recession in the next 12 to 18 months, according to a survey of CEOs and other C-suite executives conducted by the Conference Board, a business research firm. That's a stunning increase from the end of 2021, when just 22% of executives forecast a recession. 


On top of that, 15% of CEOs believe their geographic region is already in a recession. 

"CEOs and other C-suite executives see the war fueling inflation through energy price volatility and higher costs for scarce inputs. This is leading to concerns over margin compression," the survey said.

Inflation food prices

A customer shops for produce at a Cardenas Market on June 08, 2022 in San Rafael, California.  ((Photo by Justin Sullivan/Getty Images) / Getty Images)

The survey is based on data collected in May and was conducted before the Federal Reserve on Wednesday approved a 75-basis point interest rate hike, the largest since 1994. Another interest rate increase of that magnitude is expected in July, which would put the federal funds target range at 2.25% to 2.50%, the steepest since the COVID-19 pandemic began two years ago.

Hiking interest rates tends to create higher rates on consumer and business loans, which slows the economy by forcing employers to cut back on spending.

Although Fed Chairman Jerome Powell has said the central bank is not trying to induce a recession, he has not ruled out the possibility of a downturn and has admitted the odds of a successful "soft landing" are getting narrower.

"There’s a path for us to get there," Powell said Wednesday, referring to a soft landing. "It’s not getting easier. It’s getting more challenging." 

The Fed's mega-sized interest rate hike prompted a flood of downwardly revised economic forecasts on Wall Street: Bank of America raised the odds of a recession next year to 40%, while JPMorgan Chase strategists said the S&P sell-off suggests an 85% chance of a downturn. 

JPMorgan CEO Jamie Dimon

JP Morgan CEO Jamie Dimon looks on during the inauguration the new French headquarters of JP Morgan bank, June 29, 2021 in Paris. (AP Photo/Michel Euler, Pool, File / AP Newsroom)

Some of the most well-known CEOs are already warning of a recession. JPMorgan Chase CEO Jamie Dimon earlier this month warned of a coming economic "hurricane" as the result of sky-high inflation and rising interest rates, while Tesla CEO Elon Musk announced plans to cut the number of salaried workers at the electric-car company after reportedly saying he had a "super bad feeling" about the economy.

Recessions are technically defined by two consecutive quarters of negative economic growth and are characterized by high unemployment, low or negative GDP growth, falling income and slowing retail sales, according to the National Bureau of Economic Research (NBER), which tracks downturns.


Economic growth in the U.S. is already slowing. The Bureau of Labor Statistics reported last month that gross domestic product unexpectedly shrank in the first quarter of the year by 1.5%, marking the worst performance since the spring of 2020, when the economy was still deep in the throes of the COVID-induced recession.