CFOs were not just confident about the economy as a whole. Respondents predicted that their own revenues would be up 10.8% in the next 12 months, compared to a 2.4% increase in Q3. And more than two-thirds said in the most recent survey that now is a good time to take greater risks, compared to 12% in Q3. Close to half—44%—said they plan to allocate capital to new business investments, and 43% are looking to fund acquisitions.

Deloitte noted that this survey was taken days after the presidential election, when it was clear that Donald Trump would retake the White House and that both houses of Congress were likely to be in the control of Republicans. Immediately following the election, the Federal Reserve had also approved the second interest rate cut of 2024. Clearly, there were many new developments that factored into CFOs’ responses.

While those developments aren’t entirely new, the full scope of their impact is only now becoming clear. The Fed cut interest rates for a third time last year in December, but the meeting’s minutes made it clear that another one may not come for a while. Trump, known for his opposition to regulations and support for large corporate tax cuts, is now in office. In his first evening as president, he signed a stack of executive orders that could upend the way the U.S. economy as a whole has worked for generations, including possible tariffs on Canada and Mexico that could start in a week and a half, and studies into other potential tariffs on nations throughout the world. The reality of this policy shift has yet to play out—if the new tariffs happen at all—though Deloitte notes that it was in the back of CFOs’ minds when they took the survey. Nearly half—47%—said they planned to explore options to relocate portions of their global supply chains in the next 12 months.

Regardless of what happens in policy this year, it’s a fact that more companies are increasing their spending on AI technologies. These kinds of platforms can have huge impacts on CFOs and companies’ financial departments. I talked to Bill Koefoed, CFO of financial software platform OneStream, about what he sees in terms of AI developments in the finance department this year. An excerpt from our conversation is later in this newsletter.

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Until next time.

Now that he’s in office, there’s finally a little clarity. Well, kind of. Among the flurry of executive orders Trump signed Monday evening, there was one to investigate trade deficits with other nations, recommend ways to “remedy” them, and conduct a feasibility study on a new External Revenue Service—a new government department he’s floated to collect revenues from these planned tariffs. That same executive order directs the U.S. Trade Representative to review the U.S.-Mexico-Canada Trade Agreement.

So, no tariffs right now? Not so fast. As he spoke to reporters on Monday night, Trump said he is considering imposing a 25% tariff on products from Canada and Mexico starting on February 1. The New York Times reported Trump said those two nations are allowing “mass numbers of people to come in and fentanyl to come in.” 

These tariffs could be a huge blow to the U.S. economy, as economists say tariffs are often passed along to end consumers in the form of higher prices. They could also be damaging to Mexico and Canada, the U.S.’s top two trading partners, according to a fact sheet from TD Canada, which takes many of Trump’s statements about the U.S.-Canada trading partnership to task. And the tariffs could quickly spark a massive trade war. Canada has been drawing up its own retaliatory tariff plan, Bloomberg reports, as has Mexico, according to the Associated Press.

December’s inflation—the last report looking at this measure completely falling under former President Joe Biden’s time in office—hit 2.9%. While this was the highest amount of inflation since the summer, it hit consensus economists’ forecasts of 2.9%. Much of the bump in inflation came from higher gas prices, which increased 4.4% from November. Core inflation, excluding food and energy, was up 3.2%, a better reading than the projected 3.3%. 

Regardless of inflation, people were spending at the end of 2024. The National Retail Federation reported that November and December retail sales were a record $994.1 billion, 4% higher than 2023, writes Forbes senior contributor Pamela Danziger. While this level of spending might be good for business bottom lines, it might not be the best thing for the economy as a whole. In Q3, credit card balances nationwide hit $1.17 trillion—an increase of $24 billion—and 3.5% of all household debt was in some form of delinquency, according to statistics from the Federal Reserve Bank of New York. Consumer confidence also is declining, with the Conference Board seeing a drop of 8.1 points in December. The expectations index—based on consumers’ short-term outlook for income, business and the labor market—fell 12.6 points to 81.1, just above 80, which usually is a benchmark for a coming recession.

AI is transforming businesses. Here are four ways that you can use it to benefit yourself as a leader and help your team fully utilize the platforms you adopt.