The Federal Reserve raised its benchmark rate by a quarter point to 3.75%-4%, marking its first policy move under Chairman Kevin Warsh and a departure from President Trump’s preference for a rate cut. The Fed’s updated projections show officials now see the median federal funds rate ending 2026 at 4.1%, pointing to at least one more hike before year-end. Officials have cited tariffs, an energy shock, and surging AI-related capital spending as inflation drivers. CFOs are advised to stress test funding costs and production costs together, as corporate borrowing costs rise across the maturity spectrum amid jittery markets.
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