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In Optimism We Trust? Explaining the Disconnect between Post-Election Optimism and Own-Firm Expectations

Author

Listed:
  • Brent Meyer
  • Daniel J. Weitz

Abstract

We randomly split the CFO survey panel into two separate surveys around the 2024 US elections to discern whether the results of the elections had any impact on financial decision makers' expectations. Respondents to the post-election survey reported sharply higher optimism about the US economy and an improved macroeconomic outlook relative to the pre-election responses. In contrast, own-firm optimism and revenue growth expectations were not meaningfully changed between the two surveys. Among many possible reasons for this disconnect, we highlight the expected impact of the new administration's policies and attendant uncertainty related to these policies.

Suggested Citation

  • Brent Meyer & Daniel J. Weitz, 2025. "In Optimism We Trust? Explaining the Disconnect between Post-Election Optimism and Own-Firm Expectations," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2025(2), pages 1-10, March.
    • Handle: RePEc:fip:a00068:99644
    DOI: 10.29338/ph2025-02
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    References listed on IDEAS

    as
    1. Susanto Basu & Brent Bundick, 2017. "Uncertainty Shocks in a Model of Effective Demand," Econometrica, Econometric Society, vol. 85, pages 937-958, May.
    2. Nicholas Bloom, 2009. "The Impact of Uncertainty Shocks," Econometrica, Econometric Society, vol. 77(3), pages 623-685, May.
    3. Brent Meyer & Nicholas B. Parker & Xuguang Sheng, 2021. "Unit Cost Expectations and Uncertainty: Firms' Perspectives on Inflation," FRB Atlanta Working Paper 2021-12a, Federal Reserve Bank of Atlanta.
    4. Bartosz Mackowiak & Mirko Wiederholt, 2009. "Optimal Sticky Prices under Rational Inattention," American Economic Review, American Economic Association, vol. 99(3), pages 769-803, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    business survey; economic growth; optimism; policies;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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