Fed hikes have had a very negative effect on venture capital and tech firms because they have little or no cash flows and require financing that has become much more expensive.
This is likely the reason why the unemployment rate since the Fed started raising rates has increased more in California than in the rest of the country, see chart below.
High costs of financing slows down capital formation. That is how monetary policy works. With the Fed on hold for another nine months, the ongoing softening in the labor market continues.
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