Corporate executives are taking a dim view of their prospects, with a majority now expecting a recession ahead, according to a closely watched business survey released Wednesday.

The Conference Board measure of CEO sentiment showed that 57% of respondents expect inflation to come down “over the next few years” but the economy to sustain a “very short, mild recession.”

Those results reflect an overall pessimistic tone from the quarterly gauge, as the board’s Measure of CEO Confidence fell to 42, a steep drop from the first quarter’s 57 and the lowest since the early days of the Covid pandemic. Anything below 50 represents a negative outlook as the number measures the level of respondents expecting expansion over those seeing contraction.

That reading “is consistent with slowing for sure,” Roger Ferguson, vice chairman of the Business Council and a trustee of The Conference Board, told CNBC’s “Squawk Box” in an interview following the report’s release.

“All of this is telling us that the combination of inflation that is much too high to quote [Federal Reserve Chairman] Jay Powell, wages that are increasing but not keeping up with inflation, and then the inability to pass all this along is creating a very challenging dynamic,” said Ferguson, a former Fed vice chair.

The recession expectation reading wasn’t the only bad news out of the report.

Just 14% of CEOs reported that business conditions had improved in Q2, down from 34% in the first quarter. Similarly, 61% said conditions were worse, compared to 35% in the prior reading. Only 19% see improvement ahead, down from 50%, while 60% expect things to worsen, up from 23%.

One piece of good news was that 63% expect to hire in the next quarter, down only slightly from 66% in Q1. However, some 80% said they were having problems getting qualified workers, down just slightly, while 91% see wages rising by more than 3% over the next year, up from 85% in the first three months of the year.

Also, just 38% expect to increase capital spending, a sharp decline from 48% previously. Some 20% see stagflation conditions of low growth and high inflation.

Powell said in an interview Tuesday with the Wall Street Journal that he remains determined to tamp down inflation, insisting that he will need to see conditions change “in a clear and convincing way” before the Fed stops raising rates and tightening monetary policy.

Ferguson said the survey “suggests that this set of circumstances is not likely to get better anytime soon and consequently pressures on the middle and bottom line for businesses, pressure on the household sector, pressure at the CEO level, and, quite frankly, pressures on the Federal Reserve.”