(17 April 2025 – Global) Large corporate CEOs are increasingly using the word “pause” when they disclose revenue forecasts and strategic planning decisions, raising the spectre of recession in the US and globally.
The increasing use of the phrase to convey enormous uncertainty while remaining hopeful that greater clarity will emerge has set off alarm bells, Tim Paradis reports for Business Insider.
C-suite consternation is building alongside unfolding financial market distress as trade volumes grind to a halt in response to the escalating trade war launched by the US aimed squarely at China but also pulling in previously friendly trade partners, torching long standing established free trade agreements.
From SMEs heavily reliant on international suppliers to remain solvent to institutional heavy weights such as Morgan Stanley, key decision makers are uttering the word “pause” with increasing frequency as they digest the Dow Jones index falling over 1000 points four times in single trading days out of 11 instances in history since “Liberation Day”.
The administration’s trade war is undermining the global safe-haven status of the US which has provided incalculable benefits as both 10Y/30Y bond yields that usually fall in line with weaker stocks surprisingly break higher, pressuring the US Dollar sharply lower by over 13 percent in the last four months.
“Rejiggering supply lines is often difficult and expensive, so CEOs don’t tend to make those calls overnight. Instead, business leaders often make those decisions three to seven years in advance” commented The Conference Board Senior Economist, Erin McLaughlin.
“Even with a three-month halt to some tariffs, many medium and large businesses that make up our nonprofit’s membership are still grappling with uncertainty and some have decided to hold off on major decisions. Many CEOs want to better understand ‘the why and the endgame’ of the tariffs. Knowing that could allow companies to ease up on the brakes and resume a normal decision-making paradigm.”
“If adjusting to new economic conditions takes too long, the appetite for corporate activity such as mergers could fade to where the pause effectively becomes a relook and the books get put away. I am of the view that we are still on pause. We don’t know whether the economy is going to contract” stated Morgan Stanley Chairman and CEO Ted Pick.
‘While uncertainty and swings in financial markets have slowed some corporate rites of passage like IPOs, sentiment around such transitions, for now, appears to have landed on “pause versus delete.”