Home / News / India /  'Don't follow what millennials did': Zerodha co-founder Nikhil Kamath shares business advise for Gen-Z

Zerodha co-founder Nikhil Kamath has a suggestion for Gen-Z entrepreneurs amid inflation. Sharing a chart of US Fed rates from July 1954 to January 2023, Kamath said that Gen-Z entrepreneurs won't see a high growth rate in their businesses because of the higher cost of capital.

Referring to the 15-year period (2008-2022) when the US kept its interest rates low even as the inflation was higher, Kamath on Twitter wrote, "Take the narrative of 2008 to 2022 was an anomaly, not the norm; what worked for millennials will not work for Gen Z - higher cost of capital will directly impact the growth rate".

Usually, when there's inflation, the US Federal Bank typically raises interest rates to create a balance in the economy.

Kamath added that millennials like him are the "luckiest generation" for having access to capital at a low rate even with high inflation, something that is rare.

"For every young person looking to start a business, don't follow what the millennials did (luckiest generation in my mind, including myself) in that 15-year Era...," he tweeted.

The Zerodha co-founder added, "It's uncanny how #inflation and fed rates spike just before a recession over a 70-year period. A fall in inflation and the first downward change in rates could be confirmation of a #recession...".

Meanwhile, New York Federal Reserve President John Williams has said that the US central bank still has more interest rate rises ahead of it and will need to keep monetary policy restrictive for some time to come.

Moving to a federal funds rate of between 5.00% and 5.25% "seems a very reasonable view of what we'll need to do this year in order to get the supply and demand imbalances down," Williams said at a Wall Street Journal event.

"Tightening of monetary policy should help restore balance between demand and supply and bring inflation back to 2% over the next few years," Williams added.

On 1 February, the US Federal Reserve slowed its pace of interest rate hikes Wednesday, tempering its aggressive campaign to rein in costs as inflation cools, while signaling the battle is not yet over.

The US central bank announced a quarter-point hike to the benchmark lending rate at the end of its two-day policy meeting, taking the rate to a target range of 4.50-4.75%.

The Fed has cranked up interest rates eight times since March 2022, including four consecutive 0.75 percentage point increases, lifting borrowing costs in hopes of dampening demand.

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