Equity strategists at Goldman Sachs
point out the cost of money is no longer next to nothing. The weighted average cost of capital for U.S. companies has gone from near the lowest level in history to 6%, the highest level in a decade. The 200 basis point increase during the year is the largest 12-month rise in 40 years, and the Goldman team doesn’t expect a big drop anytime soon, as they think the Fed will pause once it takes rates between 5% and 5.25%.
Source: Goldman Sachs.