Hi all, I’m looking for some insight. I have a walkout basement. My home is built into a hill, so half the basement is below grade and the other half is above grade, with one wall stair stepping from below grade to grade.

My walls are poured concrete with 2x6 framing and all exterior foundation walls are completely waterproofed.

In order to eliminate a concrete ledge where the wall meets the framing, a 2 inch wall was furred out in order to retain a flat wall from floor to ceiling, so i technically have a 2x8 cavity above the concrete walls.

Question 1) do the concrete walls above grade need to be insulated, so does that small 2inch space require some sort of foam board?

Question 2) are the 2x6 walls that are framed above my concrete foundation walls at greater moisture risk if we use batt insulation from the sill plate up through the rest of the cavity?

The photo included is the wall that begins below grade and steps down onto grade and ultimately above grade.