the major stock market rally of 2023 that has defied expectations of a worsening economy is finding new support from what has been a skeptical contingent chief financial officers at major us corporations while far from unanimous in their view of the market more cfos now see the dow jones industrial average as being able to continue its rise even as cfo views on the economys direction remain negative thats according to the results from the latest quarterly survey of the cnbc cfo council which shows the view on stocks and the economy from top corporate cfos shifting in a few notable ways quarter over quarter at a time when the fed has paused its rate hikes and the stock market has outperformed expectations last quarter only 13 of cfos said they could see a new high for the dow while more than half 56 expected a return to the 30000 level now cfos are split into three roughly equal camps those who expect a new high those who still expect a return to 30000 and those making no bet on the next big move in stocks many investors in the stock market and economists have come around to the view that the economy will avoid a recession even as the fed remains committed to bringing inflation down the latest gdp data reported on thursday shows a larger than expected boost to economic growth but cfos improved market outlook is not in any way tied to belief in the soft landing scenario over 80 of cfos in the second quarter survey say they still expect a recession to occur the timeline has once again moved out with only onethird of cfos expecting a downturn to start in the second half of this year last quarter that was the expectation of more than half of cfos now just over half expect a recession to hit in 2024 – 36 saying it will begin in the first half of the year much remains unchanged and negative in cfo views on the economy while cfos say inflation has peaked they continue to see inflation 32 as the no 1 risk to their business and while us consumer spending and credit has remained relatively strong cfos rate consumer demand 18 as the next biggest risk together the 50 of what cfos say are the top external risk factors facing their business matches results from the first quarter of the year the quarterly cnbc cfo council survey was conducted among roughly onequarter of the 100plus cfo members from june 16–june 26 in a recent call with cfos ahead of the june fomc meeting multiple members of the council have expressed concerns about a deterioration in the consumer outlook that they fear will accelerate they cited a significant decline in credit scores and delinquencies and supply chain data representing demand two cfos said during a recent council event they had directly reached out to fed regional presidents to share their view that the fed should not just pause but stop interest rate increases due to their fears that the long and variable lags between changes in monetary policy and changes in the economy stocks most notably tech stocks have gained as views on the federal reserves aggressive rate hike path changed and the cfo view of rate hikes has shifted even as they cite inflation as the no 1 risk cfos are less in line with the market and with federal reserve chair jerome powell on whats coming next for interest rates half of cfos say they expect the fed to hold off on another rate increase in july with just over onethird 36 expecting a hike while traders overwhelmingly expect a rate hike and powell said in a speech this week that multiple consecutive rate hikes could be coming this slightly more dovish view detailed in the quarterly cfo survey has lowered the endofyear outlook for the yield on the 10year treasury  while the majority still expect the 10year yield to be at least equal to or higher than its current range between 35399 almost a quarter of cfos 23 now think the yield may drop below that level the largest subgroup of cfo 41 expect the 10year to end 2023 in a range of 35399 thirtyseven percent of cfos expect the 10year yield to be 4 or higher but whether that cfo view of rates is wishful thinking on the part of some companies in sectors feeling the biggest impacts from higher rate or more widespread central banking policy analysis remains unclear at a recent council private event with cfos in new york many members seemed resigned to a fed that wont change its rate path even if they believe it should one cfo who was granted anonymity to speak freely at the event was adamantly in favor of more hikes saying we need more hikes because inflation isnt whipped yet and the cfo added that based on the relative strength of us consumers they have the ability to accept additional price increases and higher interest rates even if they dont like them inflation will remain a huge problem for the economy even if cfos continue to express a positive view of the job the fed is doing fighting inflation now over 90 describe the feds actions as fair 55 or good 36 thats up slightly from last quarter but cfos do not think the fed will be successful in bringing inflation back down to its target rate of 2 any time soon most 59 think it will be 2025 or later before that occurs