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Since taking office, President Donald Trump has taken a sledgehammer to the federal government and its functions, working to try to wind down programs, departments and employees that he deems unnecessary. Among those he is trying to cut is a program that supports small businesses in underserved areas. Forbes’ Brandon Kochkodin writes the Community Development Financial Institutions Fund, a Treasury Department program created in 1994, is targeted through an executive order to cut or scale back seven federal programs.
Trump has a history of trying to eliminate the CDFI. He proposed wiping it out entirely in his 2018 budget with the argument that private lenders already had plenty of capital and didn’t need government assistance. That attempt was unsuccessful. Since the CDFI was created by Congress, Trump will need them to support cutting back the agency—something opposed by a bipartisan 28-member Senate Community Development Caucus.
CDFI has been touted as a success by many. In the last three decades, the program has awarded more than $8 billion to 1,432 institutions working with the program. The Opportunity Finance Network, a lobbying group for CDFIs, says this year’s $324 million in grants—authorized hours before Trump’s executive order to slash the program, Bloomberg reports—will drive more than $2.5 billion in economic activity with almost no defaults. A letter to Trump from the Senate Community Development Caucus states that for every $1 from the government, CDFIs pull in at least $8 in private funding.
Critics of the program have said that handing out grants is a bad idea, and economic impact can be difficult to quantify.
Bloomberg reports that Treasury Secretary Scott Bessent wants to save the program, but senior officials say it will be tightly reviewed for efficiency and cost savings. But the program seems to have been operating under “minimal operations” already. Bloomberg reports employees were working off-site from the Treasury Department’s offices in a location without internet access.
Global consulting firm Protiviti asks business leaders about their biggest risks each year. For CFOs, these risks all stem from their larger strategic role in companies today—but they are confident they can be handled through using strategy developed over the last several years of upheaval, said Christopher Wright, managing director of Protiviti’s Business Performance Improvement solution. An excerpt from my conversation with him is later in this newsletter.
ECONOMIC INDICATORS
The stock market didn’t get much better last week as President Trump’s talk of tariffs continued. He plans a “Liberation Day” announcement outlining which nations will pay which tariff rates on April 2. But as the week continued, word spread that the tariffs might not be as impactful as initially characterized. Markets edged up slightly last week, closing Friday with the Dow, Nasdaq and S&P 500 each less than a percentage point up. On Monday, Trump said that when it comes to tariffs, he “may give a lot of countries breaks” and his plans are “reciprocal, but we may be even nicer than that.” Markets rallied on Monday, with the S&P 500 up 1.8%, the Dow Jones Industrial Average rising 1.4% and the Nasdaq increasing 2.3%.
Citing the uncertainty in the economic picture, the Federal Reserve Open Market Committee decided last week to leave interest rates unchanged—at 4.25% to 4.5%. The Fed did, however, revise some percentages: Its quarterly economic projections. They revised their GDP estimate to 1.7%, down from December’s figure of 2.1%, and projected core inflation would end the year at 2.8%, up from the previous forecast of 2.5%. “Clearly...a good part of it is coming from tariffs,” said Fed Chair Jerome Powell after the announcement.
For his part, Trump believes tariffs are a reason that the Fed should cut interest rates, posting on Truth Social before the interest rate decision, “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing.”
Meanwhile, top economists are keeping a close eye on whether Trump’s policies will push the country into a recession. Last week, the UCLA Anderson School of Management published its first-ever official “Recession Watch” as part of an annual economic forecast they’ve done for 73 years. The report said that if Trump’s policies are fully enacted, they “promise a recession,” but it’s “entirely avoidable” if his policies—including high tariffs and rapid dismantling of the federal government workforce—would be pared back or more gradual. The report warns the administration: “be careful what you wish for because, if all your wishes come true, you could very well be the author of a deep recession.” Mark Zandi, chief economist for Moody’s Analytics, said on a Wednesday CNN interview that it “feels like we’re being pushed into recession” by Trump, calling the risks “uncomfortably high.” The Conference Board’s latest consumer expectations index plunged to 65.2, the lowest level in 12 years, and well below the threshold of 80, which usually signals a coming recession.
HUMAN CAPITAL
After nearly four years of negotiating, United Airlines and its 28,000-member flight attendant union are reportedly close to a deal, writes Forbes senior contributor Ted Reed. Following a demonstration of flight attendants at 19 airports worldwide last week, Ken Diaz, president of the Association of Flight Attendants at United, said the airline is finally starting to get serious at the bargaining table and is removing its concessions. Diaz said negotiations are ongoing for flight attendant scheduling, which is often the last thing before economic issues. And Diaz said he’s hopeful that pay issues will be addressed. United Airlines is the second most profitable airline, he said, but flight attendant pay ranks fifth, and they make more than 20% less than their counterparts at American Airlines.
A United spokesperson said last week that negotiations with the union are productive and they’re “eager to reach the industry-leading contract our flight attendants deserve.” More negotiations are scheduled the week of April 7 and April 21, as well as three weeks in May.
NOTABLE NEWS
The United Arab Emirates pledged to invest $1.4 trillion in the U.S. economy over the next decade following a meeting between Trump and UAE National Security Adviser Sheikh Tahnoon Bin Zayed Al Nahyan last week. It’s not clear where the money will be invested. The White House said it “will substantially increase the UAE’s existing investments in the U.S. economy in AI infrastructure, semiconductors, energy, and American manufacturing.” News organizations report that investments will likely include AI, technology, infrastructure and energy. In January, Emirati billionaire Hussain Sajwani committed to investing $20 billion to build AI data centers in the U.S.
OFF THE LEDGER
How CFOs Use Their Strategic Role To Tackle Risks
Global consulting firm Protiviti conducts an annual study asking executives what they see as the top risks to their business, both in the next few years and in 10 years. I talked to Christopher Wright, managing director of Protiviti’s Business Performance Improvement solution, about how CFOs see these risks and how they deal with them. This conversation has been edited for length, clarity and continuity.
How do CFOs and financial leaders feel about the immediate future?
Wright: They’re thematically inclined to be focused on being strategic leaders of their organization. They’re thinking beyond the numbers. That comes with being in a more strategic role that has them looking at the things that not only affect their work, but that affect their organization. The things that affect their work in the two-to-three year outlook for CFOs—economic conditions, labor costs, talent and labor availability, regulatory change and data analytics—all have a lot to do with one of their major efforts, which is the FP&A function. There are strategic risks that affect the organization, but inflation affects the forecast, and economic conditions affect sales.
Security and privacy of data are top of mind, as well. That’s for a variety of reasons. If you’re a public company, you have a very practical need to understand cyber threats and disclose them in periodic filings programmatically in the 10-K and 10-Q and on an incident basis. But the reality is stewardship of data is the CFO’s job, it's her domain, financial data or not. Protecting the organization is part of their domain. And cyber incidents are expensive, and you have to come up with the money if there is an incident. It is expensive, it’s disruptive, it can cost you reputation and top line revenue. It can cost you downtime, it can cost you the expense of remediation or, in an extreme scenario, ransom.
What the top 10 tells us is that CFOs are thinking that while FP&A is table stakes, and getting the books closed and reported timely, accurately and consistently is their job, their role includes more when they have the C-suite title. It’s strategic. It’s not being the person that tells you how to cut your way to growth by spending less but how to redirect spending to top line growth.
The economic situation has been constantly changing and unclear for the past two months. Has this changed CFOs’ viewpoints on what their risks and priorities are?
We find that the C-suite executives tend to be thoughtful and quickly move past either political drama or discourse to what practically needs to happen. If you think about whether there will or will not be tariffs, or whether or not those tariffs will be of a certain percent, they’re focused on being able to react to what that might mean to a forecast or a budget. We’re finding that our clients in the CFO community are mobilizing around how to be resilient, how to be flexible, and how to be able to produce data, especially forecast and budget data that varies based on a number of possible outcomes.
Inflation in 2022 wasn’t an issue. It became an issue during 2023, and has simply ebbed and flowed. Now, it’s not whether or not people think inflation is higher or lower, but that it might change—because the change is what results in an FP&A outcome. It’s about creating systems and processes and approaches that allow you to react to the changing needs and data requests from the organization. The ability to use data analytics to achieve market intelligence made the top 10, and it’s part and parcel of that concern: How do I create models that can show what might change here if something changes there?
Regulatory change, uncertainty and scrutiny were on the list. Third-party risks, a number of other areas [that] didn’t speak directly to what’s going on in global business and geopolitical dynamics, but they’re clearly thinking about ways to be ready to react to what happens, and to lead with suggestions and guidance on what their company should do strategically.
There are all these things CFOs are dealing with, but the report shows a lot more confidence that these issues can be handled. To what can that confidence be attributed?
CFOs have been working in this space for quite some time. The idea that they’re strategic advisors and not simply reporting on the numbers is not new. They’ve been moving that direction for some time. They’ve been availing themselves of training, staying on top of current events and availing themselves of inside and outside experts to make sure that they’re fully informed. Their confidence is higher because they’ve been focusing on a lot of these issues for quite some time and trying some of those things.
You could probably take it all the way back to the financial crisis of 2007-08, when a lot of organizations were caught unaware. Then if you fast forward, the watershed event that enabled CFOs to be ready for the uncertainty of the current time was the pandemic; the extent to which they were required to forecast, reforecast, reconfirm, reallocate and physically shift where people operated. And then deal with the supply chain disruptions that came from what that was doing to all the companies with whom they worked. That really created muscle memory in finance organizations that is enduring to their benefit today.
When [inflation] became more of a factor during 2023, they were able to maintain those skills. Now they’re practicing them again on all of the dynamics that could affect top, middle and bottom line around inflation, unemployment, tariffs, supply chain, global trade. There’s been a through line that allowed them to maintain a heightened level of awareness and preparedness, and they've been able to use those skills. They’ve been able to learn from what affected their companies in the past and improve their outcomes because they made improvements, structural change, and created models and approaches that allow them to be more flexible and more resilient.
FACTS + COMMENTS
Genetic testing company 23andMe filed for Chapter 11 bankruptcy protection this week to start the process of selling off its assets, and CEO and cofounder Anne Wojcicki stepped down to become an outside bidder for the asset sale.
$2.53: Amount Wojcicki and New Mountain Capital proposed to pay for each share of the company for last month, totaling $74.7 million. The investment firm pulled out of the deal, and Wojcicki’s solo bid for 41 cents per share was rejected
15 million+: Number of 23andMe customers over the last 19 years, according to Wojcicki
‘My belief in the company and its future is unwavering’: Wojcicki said in the X post where she said she hoped to buy the company and lead it through restructuring
STRATEGIES + ADVICE
A global trade war now seems to be beginning and in order to compete, businesses have to be adaptable.
As a business leader, it pays to make the right decisions. Here are five ChatGPT prompts to help you discover the best choices for yourself and your company.
QUIZ
Which department store closed a location in a landmark Philadelphia building on Sunday?
A. Macy’s
B. Bloomingdale’s
C. Belk
D. Dillard’s
See if you got it right here.
