1/2 Raising rates is becoming a stimulus channel as much as a brake. The FOMC held rates at 3.50–3.75% in Warsh’s first meeting as chair, but the dot plot moved the 2026 median policy rate to 3.8%. Markets interpreted this as a signal that another hike remains possible. On the Fiscal Side, federal government now has around $39 trillion of debt. Net interest expense is expected to exceed $1 trillion in FY26, equal to roughly 3.3% of GDP. Over a full refinancing cycle, every 100 basis points of higher funding cost adds roughly $315 billion per year to interest expense on publicly held debt.(BloFin Research)