The Federal Reserve released minutes from its June 16–17 FOMC meeting on July 8, revealing a committee split almost down the middle — roughly 9 of 19 officials expecting at least one rate hike before year-end 2026, while others leaned toward cuts. The 10-year US Treasury yield climbed to 4.60%, its highest since May, and the implied probability of a September hike rose to ~70%.
The Fed just released the minutes from Chair Kevin Warsh's first FOMC meeting — and the headline is that there is no headline. The committee is split 9-to-9 on whether to hike or cut before December. Warsh, true to form, withheld his own rate projection entirely, so the minutes are now the only on-record signal the market has.
Here is how a CFO reads this: the 10-year Treasury is the floor under almost every cost-of-debt calculation a company runs. When it moves from 4.30% to 4.60% in a week, the company's WACC — Weighted Average Cost of Capital — rises with it. WACC is the blended cost of funding a business, part equity, part debt. The debt part is anchored to the risk-free rate (usually the 10-year Treasury), plus a credit spread.
A CFO would ask two specific questions right now. First: do we have any floating-rate debt? If yes, the interest line on the P&L is already higher than it was in Q1. Second: are we planning a bond issuance or a capex-heavy project this year? Because at a 25-bp hike, an investment-grade company issuing $1 billion in bonds pays roughly $2.5 million more in annual interest — before the project earns a single rupee or dollar.
The lesson here isn't 'rates are going up.' It's that WACC is not a static number you set once in a financial model. It breathes with monetary policy. Every NPV or IRR calculation your team runs carries an invisible assumption about the cost of capital — and right now, that assumption just got a lot less certain.
📚 Learn the concept: Capital Structure & WACC
Source: https://www.cnbc.com/2026/07/08/fed-minutes-june-2026-.html
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