With the stock market flirting with correction territory, whiplash from President Donald Trump’s erratic tariff policy, and uncertainty about fast-changing federal policy impacts on labor and supply chains, finance chiefs are facing intensifying pressure this year to assess and offset risk. 

“Especially in things like tariffs...it’s almost bringing us back to the circa COVID-era, where the business disruption is happening fast and it’s immediate and it’s very apparent in the financials,” Connor Augustyn, director of financial operations and private equity at the Chicago-based consultancy firm West Monroe, said in an interview. “Again we’re running into mass business disruption that’s caused by external factors and in those same boardrooms all the same seats are still pivoting and looking at the CFO to say, ‘What does this mean for us, what’s the financial impact, and what can we do about it?’”

A number of market gauges are flashing red, underscoring the higher risk outlook. The CBOE Volatility Index, known as the VVIX which tracks expected S&P 500 volatility, has eased in recent days but it still remains above its long-range average of 19.5, MarketWatch reported. It closed at 21.77 Friday. And on Friday CNN Business’s Fear & Greed Index, which tracks seven indicators including junk bond demand and put and call options to measure stock market sentiment, was in “extreme fear” territory, the highest of five sentiment categories, as compared to “fear” a month ago and “greed” a year ago.

The shifts in the macroeconomic landscape — such as new U.S. tariffs putting the brakes on the Fed’s inflation fight and the hopes for lower rates — have upended expectations of a business-friendly policy and economic growth that buoyed many finance leaders’ outlooks late last year. 

In contrast, the volatility has made for brisker interest rate hedging activity this month, according to John Wahr, head of sales for U.S. Bank’s derivative products group, as companies reassess their risk exposure and adjust to market conditions. 

“In periods like this where you have heightened volatility in the market across different asset classes, usually what we see is interest rate hedging…becomes a higher priority for a lot of CFOs and treasurers,” Wahr said in an interview.  At the same, he characterized the volatility as “second tier” as compared to that seen during the COVID-19 pandemic and described the level of activity traders are seeing as “manageable but a nice pick-up in flows.” 

The moving target of on-again-off-again tariffs has been tricky for companies. Angela Santos, an attorney with ArentFox Schiff who helps companies manage and find strategies to mitigate the tariff’s impact on their businesses, said her law firm launched a tariff tracker to help their clients keep up with the changes shortly after Trump’s inauguration. 

“Companies are hearing from various sources, the news. Truth Social, the grapevine and Instagram and it’s hard to know what’s going to happen,” Santos said in an interview. “We are trying to keep the tracker updated but you have to make sure it’s correct.” 

Then too, among the complexities that companies are grappling with the new duties, is that the headline tariff number may not match what a specific company may be required to pay in duties because a number of the new tariffs are being levied on top of other existing tariffs, leading to compounded total numbers of 50% or more, she said. 

The tariffs are also bringing to light which CFOs have good data and FP&A systems that can allow them to figure out how each iteration will affect their companies, according to Augustyn, who works with CFOs on their finance transformation processes to help them sort through the technology they need to analyze data and run their businesses better. 

Augustyn sees the COVID-19 pandemic as having been a kind of round one inflection point that forced smart CFOs to invest in data systems and push toward digital transformation. Now the tariffs are emerging as a kind of round two where companies which still need to modernize their approach to data are being put to the test again, he said. 

“We’ve seen CFOs starting to realize that things are not going to slow down anytime soon,” Augustyn said. “They’re saying, ‘I’ve got to figure out how to make my team more agile and better at answering those quick questions and deal with the rapid whiplash that’s going to happen from all this uncertainty.’”