Fed Projections

Step 1 (optional): Watch the Small Business Development Center video (see credits below).

Step 2: Listen to (subscribe to beta app below) or read the key points, case study and advisor’s take below.

Step 3: Reflect on the questions below as a team then let’s talk!

Step 4: Read the post-announcement update below.

Key Points:

The Federal Reserve has raised interest rates significantly over the past two years. This has led to higher borrowing costs for businesses. Some sectors have pulled back but a broader recession hasn't yet materialized. The expectation of a recession caused lenders and investors to become more cautious in 2023. As we fast forward to today the economy is strong but tough to predict ahead of the US election. Overall unemployment is relatively low but there are challenges in some sectors. Lenders and investors are returning to the market. And inflation is an increasingly important metric to watch.

Advisor’s Take:

I attended Norcal SBDC’s event on raising capital last year and recently went back through their updated materials. It’s easy to look at the various macroeconomic indicators and be confused about what to do if you’re looking to raise money. There’s one indicator I think could make a difference and am following closely heading into this week. I believe the upcoming Fed decision this week may change opportunities to raise capital.

My long odds prediction: The groundhog will nibble but not bite. I think founders should expect a more favorable environment to raise capital following a Fed announcement to lower rates 25 bips this week. I believe this will make only a small difference at first but start a trend toward easier money in the coming year. We’ll see if I’m wrong!

Post announcement update as of September 18: