Cathie Wood, ARK Invest’s founder and CEO, is known for her big—and often risky—bets on “disruptive” technology companies. From Tesla to Zoom, she’s taken chances on some of the most high-flying, growth-focused companies on the planet—and had several big wins along the way. Over the past few years, though, many of her favorite picks have been vulnerable to rising interest rates as the Federal Reserve has moved to rein in inflation. Simply put, rising borrowing costs have crippled many of the unprofitable tech stocks that Wood relies on. But the good news is the pain may be coming to an end, she says—both for her fund and for the economy.
Not long ago, Wall Street’s biggest fear was “sticky” inflation. The idea was that consumer price increases might stagnate around 4% to 5% due to the tight labor market, entrenched inflation expectations, or even demographics, forcing Federal Reserve officials to keep interest rates “higher for longer” in order to achieve their 2% target inflation rate.
