(FORTUNE Magazine) – Having felt the heat for months, CFOs are finally relaxing into a sunnier frame of mind. From a low of 24 last June, FORTUNE's Business Confidence Index topped out at 161 in December and settled at 146 this June. And 78% of those polled are optimistic about U.S. economic growth over the next two years, vs. only 47% in June 2003, when we were just three months into the war with Iraq. Meanwhile, a whopping 72% feel business conditions are "good" or "very good," compared with 33% a year ago. And though most CFOs are still being relatively cautious with capital budgets, they are slowly loosening their hold on the purse strings--a good sign for investors and economy watchers alike.

--Kate Bonamici