Economists have revised their forecasts to anticipate slower growth, higher inflation and a greater recession risk due to President Donald Trump's trade policies, according to The Wall Street Journal's quarterly survey. The probability of a recession in the next year has increased to 45%, with gross domestic product expected to grow 0.8% this year. Economists expect the core personal consumption expenditures price index to rise 3.5% by year's end, while unemployment is expected to reach 4.7% by December.
President Donald Trump has expressed reluctance to further increase tariffs on China, citing concerns about hindering trade. Speaking from the Oval Office, Trump noted that Chinese officials, possibly at the behest of President Xi Jinping, have reached out to initiate talks. Currently, the US has imposed 145% tariffs on Chinese goods, with China retaliating at 125%. Trump is optimistic about reaching a trade deal that includes the sale of TikTok's US assets.
Moody's Ratings has increased its default forecast for speculative-grade companies to 3.1% this year, up from 2.5%, amid escalating global trade tensions. The trade wars are expected to dampen economic growth and tighten financing conditions, potentially pushing the default rate as high as 6% if a significant negative shock occurs.
President Donald Trump has criticized Federal Reserve Chair Jerome Powell for not cutting interest rates, expressing frustration over the impact of tariffs on the economy. Trump suggested he could remove Powell, but Powell has reiterated the Fed's independence, stating that he would not step down unless removed for cause. Powell has said that the Fed is holding rates steady due to uncertainty from Trump's tariffs, which he says could worsen inflation.
Just 4% of finance leaders report their companies are "maturing and scaling" generative AI use, while 61% are in the initial stages of exploration, according to a Hackett Group survey. Thirty-five percent of finance leaders cite a lack of skills and experience as a major concern, but only 4% see staff training as an issue. Hackett Group warns that organizations not adopting AI may fall behind in agility and efficiency.
Roughly two-thirds of US companies are experimenting with AI agents, up from 37% last year, according to a KPMG study. However, full-scale deployment of AI agents remains flat at 11%. AI agents are being used for tasks like data analysis, administrative duties and call center operations.
Tax departments often struggle with data overload and inefficient manual processes, with only 26% having tax data systems and 80% underinvesting in technology, according to Thomson Reuters. A robust data management strategy and secure central data repository is crucial for tax departments to leverage automation and analytics, ensuring seamless access to information and enhancing efficiency and compliance.
Leaders should look at tough conversations as an opportunity for improvement rather than dreading difficult topics, writes Michael Timms, a leadership expert. "Tough conversations may never be easy, but with the right approach, they can become one of your greatest leadership strengths and your organization's biggest advantage," Timms writes.
