Key Takeaways

  • The quarterly CFO survey, jointly released by Duke University's Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta, shows that CFO optimism about the U.S. economy edged lower in the second quarter of 2026, as energy price shocks havepushed inflation back to the top of financial executives' list of concerns。
  • The survey shows that CFOs' optimism index about the U.S. economic outlook fell to 60.6 from 61.7 in the first quarter (on a 0-100 scale, with 100 representing extreme optimism). Inflation has returned as the top concern, contrasting with the first quarter, when tariffs and trade policy were the biggest source of business anxiety. Non-labor costs ranked second in this survey, and geopolitical risk entered the top three for the first time.
  • About two-thirds of respondents said rising energy prices have increased their companies' unit costs, but only about one-third have raised external selling prices. The relatedpress releasenotes that "this indicates many businesses have not yet passed higher energy prices on to customers."

Deep Dive

This CFO survey received 530 responses, with the survey window running from May 18 to June 5. During the survey period, geopolitical tensions in the Middle East intensified—after the U.S. and Israel launched airstrikes on Iran in late February, shipping through the Strait of Hormuz was disrupted, keeping energy markets under pressure.

According to data from the U.S. Bureau of Labor Statistics, affected by the near-total blockade of Iranian oil exports, May consumerprices rose 4.2% year over year, the largest increase in three years. Surging energy prices were the main driver.

However, with the U.S. and Iran reaching a preliminary agreement to end the conflict and reopen the Strait of Hormuz, Brent crude oil futures on Wednesdayfell below $75 per barrel for the first time since the war began。

U.S. Energy Secretary Chris Wright said in aninterview with ABC Newson Sunday that oil shipments through the strait "have returned to normal," and predicted the market would continue to stabilize regardless of the outcome of further U.S.-Iran negotiations.

The Duke-Fed survey also included a hypothetical scenario: if oil prices averaged $120 per barrel for the remainder of the year, companies would significantly increase their cost pass-through rates. In this scenario, respondent companies expect unit cost growth to rise to 7.3% and selling price increases to reach 6.7%, both far above current levels.

Brent Meyer, an economist at the Atlanta Fed, said in Wednesday's release: "A notable feature of the current situation is that firms affected by rising oil prices have only passed a portion of their cost increases through to selling prices; but if oil prices rise further and remain elevated, the pass-through rate would rise to about 90%."

Meyer added: "This suggests that under sustained high-cost pressure, businesses may be unwilling or unable to absorb more costs."