Good morning. In a year defined by uncertainty, CFOs must stay agile and make proactive decisions to navigate a financial landscape where market sentiment can “flip on a dime”.
That was the focus of an interesting conversation I had with Amol Dhargalkar, chairman and managing partner of Chatham Financial, a global financial risk management advisory and technology firm. Dhargalkar shared insights from his discussions with CFOs, highlighting three major issues.
Financing now, not later
“If there’s one big theme I can point to, it’s that when there is an opportunity for financing, CFOs are taking advantage of it,” Dhargalkar said.
He explained that this bias toward immediate action is less about the U.S. Federal Reserve’s moves on interest rates and more about market sentiment, which can shift rapidly due to geopolitical or policy changes. Many CFOs prefer to secure deals now rather than risk adverse developments, such as new tariffs, that could negatively affect their businesses.
Recent data shows a significant amount of issuance in the first half of the year, reflecting this proactive approach, Dhargalkar noted. Even if interest rates might decline modestly in the coming months, the risk of waiting often outweighs the potential benefit for many finance leaders.
Navigating volatile bond yields
“We’ve seen a lot of volatility in government bond yields, which has played into the market in a variety of ways,” Dhargalkar explained. CFOs are closely monitoring these fluctuations, though uncertainty about future movements remains high. While this doesn’t mean investors are abandoning U.S. markets, it is a key area of concern for finance leaders.
Concerns about the potential impact of President Trump’s tax bill rattled bond markets last month, primarily due to fears it would sharply increase the U.S. national debt, Fortune reported.
The dollar’s impact and currency risk
The strength—or weakness—of the U.S. dollar is also top of mind, especially for multinational companies, Dhargalkar said. Many CFOs are asking whether the recent dollar weakness is temporary or a longer-term trend, and how they should manage related currency risks. This environment has prompted some companies to implement or expand foreign exchange hedging programs, particularly those that previously had limited exposure, he explained.
Managing currency risk is more challenging for smaller multinationals, which are less likely to have robust hedging programs in place, Dhargalkar said. For companies with significant overseas earnings, a weaker dollar can be a net positive, as foreign revenues translate into more dollars, he explained. However, the rapid movement of the dollar in either direction typically sparks extensive internal discussions about hedging strategies and financial forecasts.
When I asked Dhargalkar his biggest piece of advice for CFOs, he said: “Rethink their approach to capital structure and financing tools.” As companies move beyond “firefighting mode,” they should consider diversifying their issuance base—such as issuing debt abroad or exploring private credit markets—rather than relying solely on traditional U.S. financing options, he suggested.
Today’s financing tools are more flexible, though often more expensive due to higher rates compared to several years ago. “Don’t feel like you’re stuck with the tools of yesterday,” Dhargalkar said.
Sheryl [email protected]
This story was originally featured on Fortune.com
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