Tariff-driven pessimism drives ‘wait and see’ approach

NASHVILLE, Tenn. — As tariff and macroeconomic uncertainty continues to drive pessimism in the marketplace, businesses are taking a wait-and-see approach to their operations. 

Business leaders in the Chicago Federal Reserve-area consistently describe the current market environment as one of extreme uncertainty — characterized by the frequency with which terms like “wait and see,” “treading water” and “chaos” are used to describe it, Chicago Federal Reserve economist Martin Lavelle said at Equipment Finance Connect 2025 on May 14.  

While some equipment areas such as IT and deferred maintenance are seeing capital expendutres, most segments are waiting for further marketplace clarity. 

“With CapEx, it’s IT, deferred maintenance, and not much else, and we’re hearing about that, a lot of … wait and see, holding trade wires and so forth,” he said.  

“It’s uncertainty like, I’ve never heard people talk about it … it’s hard for us to have some kind of clarity about how to think about things.” 

The Blue Chip Consensus Economic Forecast, which is published by private forecasters at the start of each month, showed a significant drop in optimism, sinking from a 2% real GDP growth forecast in January to 0.4% in May, LaVelle said. 

“In just five months, that’s just the level of pessimism that’s increased about the economy.” 

LaVelle added that “2024 ended with quite a bit of momentum in the economy, which has actually probably helped us carry through to this point so far in the year, but we had much more optimism at the beginning of the year.”    

Equipment Finance Connect takes place May 14 and May 15 at JW Marriott Nashville. Follow all the latest news from the event here.