CFOs absorb energy shock but warn inflation pressure is building
A Fed-Duke survey found many companies held back from passing energy costs to customers, even as inflation became their top worry.
By Sofia Marchetti · World Affairs Correspondent
3 min read
U.S. finance chiefs say their companies have largely absorbed higher energy costs tied to the Strait of Hormuz disruption, according to a new survey. The finding matters because those same executives are becoming more worried that inflation will keep rising and may become harder for businesses to contain.
The survey, published Wednesday by the Federal Reserve Banks of Richmond and Atlanta and Duke University’s Fuqua School of Business, covered 530 financial executives. It found that two-thirds of companies reported higher production costs in the previous quarter because of energy price shocks, while only one-third said they passed those costs on to customers.
Inflation is now a much bigger concern in the C-suite, according to the survey. A quarter of firms named it as their top concern in the second quarter of 2026, up from 9.5% in the prior quarter.
The same survey showed chief financial officers cutting their outlook for U.S. economic growth. Their projection fell to 1.8% this quarter from 2.1% in the prior quarter, according to the Richmond Fed, Atlanta Fed and Duke.
Companies may have less room to absorb costs
Atlanta Fed economist Brent Meyer said companies have kept pass-through rates low so far, but warned that could change if oil prices stay high or climb again. He said pass-through would rise to about 90% under sustained cost pressure.
“This suggests that in an environment of sustained higher cost pressures, firms may be unwilling or unable to absorb any more costs,” Meyer said in a statement.
The CFO survey points to a divide between executives’ view of their own companies and their view of the broader economy. The Federal Reserve’s annual Survey of Household Economics and Decisionmaking showed a similar split among consumers: 73% of respondents said they were doing OK or living comfortably in 2025, compared with 75% in 2024, while only 25% rated the national economy as good or excellent.
The Fed survey said 28% of respondents rated the economy good or excellent in 2024, and 49% did so before the pandemic. That gap suggests households, like companies, can report stable personal finances while still seeing the broader economy as weak.
Oil remains above prewar levels
Fortune reported that the U.S. and Iran signed a memorandum of understanding earlier this month aimed at setting up a final settlement of the war. The Strait of Hormuz has technically reopened, according to Fortune, but the main central route remains mined and closed, and traffic is still below prewar levels.
Kpler, a shipping analytics company, said 35 ships moved through the strait last Saturday. Before the war, Fortune reported, about 20% of the world’s oil moved through the route.
Oil prices have fallen to about $74 a barrel from an April peak of about $115, according to Fortune. Analysts cited by Fortune warned that prices may remain above prewar levels because of complications around the Strait of Hormuz and the tendency of energy prices to rise quickly and fall more slowly.
The U.S. Energy Information Administration projects oil prices will level off at elevated levels rather than return to prewar norms. Fortune also reported that restricted supply has drawn down strategic oil reserves to their lowest levels in decades, and that mine-clearing, congestion and rerouted oil and natural gas flows could slow a return to normal traffic.
Inflation remains above 4%, compared with the Federal Reserve’s 2% target, according to Fortune. Chicago Fed President Austan Goolsbee told Marketplace this week that tariffs and energy shocks have pushed the U.S. backward in its inflation fight, while services inflation remains a concern because it has historically been persistent.
This story draws on original reporting from Fortune.