Show Notes
Kevin Warsh refused to rule out a rate increase with inflation above the 2% target and oil above $100, and the two-year Treasury yield moved about 20 basis points in a session. The position here is blunt: CFOs who built 2026 rate cuts into a single base case treated a forecast as a fact, and the arithmetic of refinancing at 7% instead of 5% costs a billion dollar balance sheet roughly $20 million a year.
You walk away able to rerun your capital budget at a higher discount rate, pressure test acquisitions and capex that depend on financing, check interest coverage covenants for a breach caused by rates alone, and price tariff uncertainty into your risk premium.
0:00 Warsh signals another rate hike 0:52 How 20 basis points moves hurdle rates 1:38 Stress testing plans for rates up 100bps 2:25 Interest coverage covenants and leveraged buyouts 3:17 Fed credibility, tariffs and risk premium 4:10 Rerun your biggest decision at plus 150bps
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