Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Fed Update On Wednesday the Fed gave us an update on their plans for QT and rate hikes for the rest of the year. The main takeaway - we saw our first rate hike since 2018, or 25bps. And the expectation now is that we’ll see 7 more rate hikes over the rest of 2022. This was already priced into market (it was the expectation) so we didn’t see a move downwards in the market. In fact, since the Fed meeting on Wednesday growth software has ripped higher >10%. Many are asking why? The Fed was hawkish, which should hurt growth stocks. Here’s my take - in generally software multiples are NOT correlated with interest rates over long periods of time. However, in periods of rapid change (like the end of 2018) they tend to be highly correlated. The market we’re in the middle of is highly uncertain. From the war to inflation to Fed policy there are too many variables at play. In a world of mass uncertainty we simply saw many saying “we’re going to sit out this market until there’s more clarity.” Some people were talking about 10+ rate hikes! The tone the Fed set was more clear in this meeting - and so for the first time in a couple months there’s at least a little more certainty that the Fed won’t go totally crazy with rate hikes this year. Removing the outer bound (10+ rate hikes) from the realm of possibilities narrowed the dispersion of outcomes for the end of the year. In turn, this reduced the uncertainty and we saw folks re-enter the market