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What Do Flat Treasury Yields Signal For Founders?
Description
U.S. Treasury yields were little changed ahead of the Federal Reserve's policy meeting, signaling a wait and see stance among investors. Chair Jerome Powell will speak after the decision, and markets will parse the policy statement and remarks for guidance on the duration of restrictive policy. The two year and ten year notes guide expectations for short and long term rates, affecting bank credit lines, SOFR based loans, SBA financing, and venture debt. Cash management returns in Treasury bills and money market funds depend on front end yields, influencing ladder strategies. Equity valuations and exit plans remain sensitive to the level of the ten year, with any change likely to affect deal pricing and timing. Founders are advised to run interest sensitivity scenarios, review covenants, and engage lenders early as guidance becomes clearer.
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