High Interest in Regulation, Monetary Policy, and Corporate Tax
About one-third of CFOs at U.S. companies have postponed or scaled back investment plans ahead of the U.S. presidential election.
On the 25th (local time), the Federal Reserve Banks of Atlanta and Richmond, along with Duke University's Fuqua School of Business, announced these findings based on a survey of 479 CFOs nationwide.
Twenty-one percent of respondents said their companies postponed investments due to uncertainties related to the U.S. presidential and congressional elections. Fifteen percent reported scaling back investment plans. Sixty-four percent said the election had no impact on their investment decisions. Since multiple responses were allowed, some respondents may overlap, but foreign media analyzed that over 30% of CFOs indicated election uncertainty negatively affected their investment plans.
Brent Meyer, an economist at the Federal Reserve Bank of Atlanta, and Daniel Wietz, the lead investigator, stated that companies heavily influenced by the election tend to be less optimistic about future prospects and are less likely to invest in expanding production capacity or replacing or repairing existing assets. Instead, they are more likely to invest in equipment, structures, and land for cost-cutting purposes.
Foreign media reported that a significant number of companies are unable to proceed with investments amid the tight race between Vice President Kamala Harris and former President Donald Trump. Such postponements and reductions in investment could deal a significant short-term blow to economic growth. Additionally, these companies do not expect to overcome growth slowdowns in 2025.
However, companies generally appear to maintain an optimistic attitude toward the overall U.S. economy. Sixty-nine percent of respondents said their companies are performing strongly, and 60% said the U.S. economy is generally strong.
The issue CFOs are most concerned about in the election is regulatory policy (60%). About 59% are interested in monetary policy, and 54% are focused on corporate tax policy.
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