Interest rates, which hit a 22-year high last month, are a great unknown for finance professionals right now. What happens from here is anyone’s guess—and the answer you get will depend on who’s guessing.

Previously, Fed Chair Jerome Powell suggested rate hikes could finally pause this September, while acknowledging that the Fed needs to assess data before making any kind of decision. In recent weeks, different Fed officials have also weighed in, sometimes with considerably different takes.

In other words, it’s a bit of a shrug. Who knows? But we do know the intense ripple effect that rising interest rates have already had, with borrowing costs skyrocketing for consumers and banks charging higher rates to borrowers.

“Overall, interest rates reflect the aggregate sense of risk in the macroeconomic environment,” Michael Bayer, CFO of cloud storage provider Wasabi Technologies, told CFO Brew. “There’s a lot of uncertainty out there.”

Click here to read more about interest rate strategies.—NP

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Things are looking up for Home Depot. After a gloomy first quarter during which sales fell 4.2%, the retailer performed better than expected in Q2. It reported revenue of $42.92 billion for the quarter, higher than the $42.23 billion it projected earlier in the year. Its earnings per share came in at $4.65, better than the expected $4.45.

But the company is maintaining its guidance for the full year and anticipates a 2%–5% drop in sales for the fiscal year. In its earnings call, CEO Ted Decker struck a cautious note, stating that the home improvement market has entered a period of “moderation” after the pandemic-era DIY boom.

Consumers appear to be deferring big-ticket discretionary purchases, such as patio furniture and appliances, Billy Bastek, executive vice president of merchandising, said. Sales of $1,000 or more are down 5.5% YoY. The movement away from large purchases continues a trend that began in Q4 2022.

Keep reading.—CV

What if? That’s the question that you’ll ask yourself over and over (and over) when engaging in scenario planning, a well-worn tool that business leaders use to make agile, forward-thinking decisions about future challenges.

In finance, scenario planning is largely what it sounds like: Leaders analyze potential uncertainties and opportunities in future conditions in order to strengthen the accuracy of financial forecasts.

“As the Covid-19 pandemic has shown, many situations lack historical data for teams to refer to when creating plans, making swift decisions and accurate forecasting difficult,” an Oracle report noted. Scenario planning can help finance leaders “minimize risk, stay agile, and maintain business continuity,” the report noted.

For more on scenario planning, click here.—NP

Today’s top finance reads.

Stat: 7.09%. That’s the current mortgage rate, the highest it’s been in years. The high mortgage rates pose a macroeconomic risk as homebuyers are stuck and sellers are staying put, a stasis that threatens economic growth. (the Wall Street Journal)

Quote: “It isn’t as surprising to us that the consumer is as healthy as they continue to be. I think that what we’ve been surprised about is that the consumer is still spending on goods while they have clearly been spending more and more on services, particularly this summer.”—David Silverman, retail analyst at Fitch Ratings, on the strong consumer spending buoying retail earnings this quarter. (the New York Times)

Read: Reading the tea leaves of this economy is practically impossible. (The Atlantic)

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