Tariffs, taxes, regulation: What to expect from the new administration | C-Suite Insights 11.13.24
Election Results Have No Effect on Fed Policy—For Now
The Fed cut interest rates by 25bp to 4.50–4.75% and maintained the pace of balance sheet reduction (i.e., quantitative tightening) at the November 6-7 FOMC meeting.?
Economy in a sweet spot: Inflation is heading back to target, the labor market is “solid,” and real GDP growth has surprised to the upside, in the Fed’s view.?
Chair Powell stated that the US election results will have no impact on monetary policy in the near term. He also said the Fed will not proactively alter the path of monetary policy to account for proposed changes in fiscal policies on the campaign trail.?
The TCB take: We maintain our expectation of another 25bp interest rate cut in December, but our call for 25bp cuts per meeting in 2025 through Q3 2025 to 3.00–3.35% is now in flux.?
Major fiscal, trade, and tax policy changes may hasten, slow, or even reverse the course toward the new equilibrium fed funds rate. Look for our updated forecasts in the weeks ahead.
Potential Early Actions from the New Administration
The President-Elect has promised to take several actions upon taking office that could deliver immediate impacts: ?
The TCB take: It’s early days in understanding what policies the new administration will adopt and how quickly. It seems clear, however, that it wants to learn from—and change—its slow start in 2017 and is prepared to take significant actions early in the administration.?
The Conference Board Annual C-Suite Outlook Survey Is Now Live
Now in its 26th year, the C-Suite Outlook survey yields insights that have guided leaders through financial uncertainty, technological revolutions, geopolitical turmoil, global health crises, and climate challenges. Whatever your industry, your perspective is invaluable. It benefits the entire business community, and we appreciate the time you invest in responding. ?
By participating, you can request the full report as soon as it is available in early 2025—as well as get early access to our data comparison tool. Survey closes November 29.?
Number of the Week: 53%
53% of surveyed executives report their companies have adjusted their DEI terminology both internally and/or externally over the past year, with another 20% considering similar changes.?
But few plan to dial back DEI communications: Only 9% anticipate scaling back communications externally in the coming year, with just 3% planning to do so internally. ?
Why the shift in language? Many organizations are moving toward broader, more inclusive concepts like “inclusion,” “belonging,” and “engagement” that may carry less legal risk. ??
The TCB take: This trend will likely endure—and potentially gain momentum—given the DEI policy perspectives from the incoming US administration. ?
Companies thinking about modifying their DEI terminology and goals should consider:?
US Elections: The View from Europe
For European executives, getting clarity on the incoming administration’s stances on trade, defense, and climate are the top priorities, says Maria Demertzis , Leader of the ESF Center at The Conference Board Europe .?
Defense and Ukraine: The incoming President’s stances on NATO and Ukraine put defense spending at the top of Europe's agenda. The EU will want to coordinate defense spending between its members, potentially issuing common debt or adopting its new fiscal rules to exclude defense spending.?
Trade and tariffs: The new US administration could impose 10–20% tariffs on the EU’s EUR 500 billion export of goods to the US, significantly distorting trade in the continent and beyond. We expect the EU to respond proportionally.?
Energy and climate: If the new administration rolls back the Inflation Reduction Act and/or exits the Paris Agreement, then the EU will face pressure to do more on climate. With defense now the priority, this will be tough. ??
The TCB take: With European business confidence already low, European business leaders face an even more challenging macro environment heading into 2025.?
CMO Compensation Trends Indicate the Evolving Nature of Marketing
TCB Benchmarking data indicates that the median total compensation for a CMO reported in the top five paid officers in S&P 500 companies is $5,003,000. ?
This shows a 2.9% drop vs. 2023, with the hypothesis that the decline is a byproduct of the continued “unbundling” of the traditional singular CMO role into two or more positions focused on growth, data, and customer satisfaction.?
Does unbundling work? The median total compensation for CMOs in the Russell 3000, where marketing is more likely to be handled by a single leader, rose by 12.8% to $1,917,000. Note: In these companies, women CMOs earn 2.2% more than their male counterparts.?
As the Political Landscape Evolves, So Must DEI Tactics
Emphasizing DEI as integral to corporate culture and business success, and adjusting DEI strategies based on political, legal, and societal shifts, can mitigate scrutiny and enhance organizational reputation.?
With the 2024 US presidential election now decided, CEOs and DEI leaders should prepare for a potential escalation in anti-DEI rhetoric, accelerated backlash, and additional DEI-related legislative and policy changes. ?
The TCB take: Leaders should prepare for these shifts by: ?
This approach advances DEI and business success together, no matter which party presides in the White House or Congress.?