# CFO Strategies for Sustained High Borrowing Costs Post-Midterms Finance leaders must prioritize capital discipline and risk management amid ongoing fiscal and political uncertainty. - **Source:** [Fortune | FORTUNE](https://brifing.si/source/769282ef-327a-4454-909a-3c7936216004) - **Published:** 2026-11-04 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/bf9a20a0-acef-4163-bbf2-738fb1723a9d ## Persistent Financing Challenges Finance leaders should prepare for sustained higher borrowing costs through 2027 regardless of recent midterm election outcomes. Factors such as growing national deficits, strong capital demand, and persistent inflation volatility continue to pressure long-term rates. Consequently, CFOs must prioritize disciplined capital allocation and robust debt management to navigate this complex environment. ## Political Gridlock and Volatility While divided government does not automatically trigger higher term premiums, repeated budget disagreements and debt ceiling risks reinforce upward pressure on costs. Gregory Daco notes that fiscal uncertainty impacts market sentiment significantly. CFOs are advised to maintain hurdle rates that reflect a structurally higher and more volatile cost of capital environment. ## Short-Term Credit Risks Political uncertainty often leads banks to tighten credit terms and reduce overall lending capacity. Mark Williams warns that legislative gridlock can cause spikes in short-term borrowing costs. Companies relying on commercial paper should proactively diversify their financing sources, secure credit lines across multiple banks, and consider shifting toward longer-term funding structures. ## Data Center Regulatory Scrutiny AI infrastructure development faces increased political scrutiny as data center costs become a public concern. With at least 14 Ohio towns passing development restrictions, developers face regulatory hurdles that complicate project financing. Private credit funds are expected to demand higher interest rates, potentially impacting the valuation of outstanding AI-related corporate bonds. ## Refining AI Investment Models CFOs must return to corporate finance fundamentals when evaluating AI projects. This includes utilizing conservative net present value assumptions and multi-variable scenario analysis. Given the potential for public backlash if AI investments raise power costs, leaders should prioritize projects with measurable productivity gains while fully accounting for infrastructure and energy expenses. ## Operational Resilience Strategies Government contractors should specifically evaluate how potential payment delays resulting from political gridlock might impact their cash flow. Furthermore, because shutdowns can delay the release of critical economic data, finance teams should develop internal models to fill these information gaps. Protecting balance-sheet flexibility remains essential for maintaining operational stability during periods. ## Human Capital and Technology Strategic investment requires pairing technology adoption with investments in workers and skills to ensure long-term value. Gregory Daco emphasizes that companies must demonstrate clear productivity benefits to justify costs. By integrating workforce development into their financial planning, organizations can better mitigate the risks associated with concentrated technology benefits and rising energy bills. ## Strategic Capital Allocation The ability to deploy capital effectively remains the primary differentiator for growth in the current economic cycle. CFOs must stress-test investment hurdles against a range of financing costs to ensure returns exceed the cost of capital. Companies that demonstrate this financial discipline will be best positioned to pursue growth despite ongoing volatility. ## Sources covering this story - https://fortune.com/2026/11/04/midterms-wont-ease-borrowing-costs-heres-what-cfo-should-do-now/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._