With interest rates remaining elevated and uncertainty surrounding the Federal Reserve’s next steps in its monetary policy, Techstars CEO Maëlle Gavet joins Yahoo Finance to share her perspective on how higher rates are hampering tech innovation.
Gavet notes that higher interest rates "limit the ability for venture capital firms to raise funds," which consequently reduces their capacity to invest in innovative startups. This environment, in turn, makes it increasingly difficult for startups to grow their businesses, creating a continued cycle.
Gavet points out that due to persistently high inflation numbers, it becomes challenging for the Fed to cut rates. Although markets (^DJI, ^IXIC, ^GSPC) are hoping to see an interest rate cut sometime in 2024, she states that she is "not seeing a fundamental change" in inflation that instills confidence in the Fed’s willingness to pursue such a move.
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