CFOs Expect Inflation to Continue into 2027

CFOs expect inflation to continue well into 2027, this reshapes how companies plan for growth, investment, and risk. While fears of an immediate recession have eased, expected inflation rates are still projected to stay above central bank targets, forcing CFOs to prepare for prolonged cost pressure, cautious consumer demand, and slower monetary easing. As a result, inflation is no longer viewed as a temporary disruption, but rather as a core assumption in long-term financial strategy and forecasting.

This outlook reflects a growing consensus among finance chiefs: even if inflation moderates, it is unlikely to return to pre-pandemic norms quickly. As a result, CFOs are preparing for a prolonged period of cost pressure, cautious consumer behavior, and restrained monetary policy easing.

Why CFOs Expect Inflation to Stay Higher for Longer

The belief that inflation will linger is grounded in both macroeconomic signals and on-the-ground business realities. In a recent CNBC CFO Council survey, more than half of respondents said inflation is likely to remain above the Federal Reserve’s target rate through 2027. This expectation persists despite some improvement in headline inflation metrics.

From a CFO perspective, inflation isn’t just a number reported by government agencies, it shows up in wage demands, supplier contracts, insurance premiums, and borrowing costs. Even when certain prices stabilize, structural factors such as labor shortages, geopolitical uncertainty, and supply chain realignment continue to exert upward pressure. 

Expected Inflation and the Recession Question

While inflation concerns remain high, recession expectations are more divided. In the same CNBC survey, 59% of CFOs said they do not expect a recession in the coming year. That view aligns closely with findings from a separate AICPA and CIMA survey, where just over half of finance leaders believe the U.S. economy has either already entered or will enter a recession by the end of 2026.

This split highlights an important nuance: CFOs may not be bracing for an outright downturn, but they are planning for slower, more uneven growth. In that environment, expected inflation becomes a bigger strategic issue than recession risk alone, influencing pricing strategies, capital allocation, and workforce planning.

How Long Will Inflation Continue?

When asked how long inflationary pressures might persist, many CFOs point to at least the next two to three years. Expectations are not for runaway inflation, but rather for a sustained period of rates that sit uncomfortably above central bank targets.

This outlook helps explain why CFOs are adjusting their assumptions around cost control and profitability. Instead of waiting for a rapid normalization, finance teams are embedding higher baseline costs into forecasts and scenario models. The assumption is clear: inflation may cool, but it won’t disappear quickly.

The Federal Reserve and Interest Rate Expectations

CFOs are also recalibrating their expectations around monetary policy. Survey respondents anticipate interest rate cuts from the Federal Reserve, but not an aggressive easing cycle. Excluding any anticipated near-term cut, many CFOs expect only one to two additional rate reductions through mid-2026.

This cautious outlook suggests that finance leaders are planning for a prolonged period of relatively tight financial conditions. Higher-for-longer rates increase the cost of capital, influence debt refinancing strategies, and raise the bar for investment returns. All factors that intersect closely with inflation expectations.

Business Confidence Remains Cautiously Optimistic

Despite concerns about inflation, overall economic sentiment among CFOs is not uniformly negative. Roughly two-thirds of survey respondents described themselves as optimistic about the economy’s direction, with a small but notable portion saying they are very optimistic.

This cautious optimism reflects confidence in operational resilience rather than macro certainty. Many CFOs believe their organizations can navigate continuous inflation through pricing discipline, productivity improvements, and more sophisticated financial planning, even if external conditions remain challenging.

Inflation, AI Investment, and Strategic Tradeoffs

Interestingly, inflation has not dampened CFO interest in artificial intelligence (AI). A significant majority of leaders reported ongoing investment in AI, and more than a quarter said their companies are underinvesting in the technology.

For many CFOs, AI is viewed as a partial counterbalance to inflationary pressure. Automation, forecasting improvements, and efficiency gains are seen as ways to protect margins when costs rise faster than revenue. This reinforces the idea that inflation expectations are shaping not just defensive strategies, but also long-term transformation initiatives.

What Happens If Inflation Continues to Rise?

Deloitte’s study highlights that CFOs are no longer treating inflation as a short-term volatility factor but as a structural condition that must be embedded into planning, forecasting, and operating models. The study notes that rather than optimizing for a single “most likely” outcome, CFOs are building flexibility into budgets and capital plans to account for sustained inflation and uneven demand patterns.

Importantly, Deloitte emphasizes that prolonged inflation is accelerating the need for more sophisticated finance capabilities. The research underscores that organizations able to connect financial data with operational drivers are better positioned to respond when inflation erodes purchasing power or disrupts consumer behavior.

If inflation proves more stubborn than expected, CFOs anticipate a more complex planning environment. Prolonged inflation could delay interest rate relief, increase wage pressures, and intensify competition for capital. It would also place greater emphasis on scenario planning, liquidity management, and real-time forecasting.

Inflation as a Planning Assumption, Not a Temporary Shock

The takeaway from recent surveys is clear: inflation is no longer viewed as a temporary anomaly. CFOs expect inflation to remain a defining feature of the economy into 2027, even if growth avoids a sharp downturn. For finance leaders, this means shifting from reactive cost management to proactive, long-term planning. Inflation expectations are shaping how companies forecast, invest, and compete.