Episode Details
Back to Episodes
Why Small Caps Are Outperforming as the Fed Holds Steady
Season 1
Episode 12
Published 1 month, 2 weeks ago
Description
The Russell 2000 has surged 3.4 percent in the past five days, while the S&P 500 gained just 1 percent. Lucas and Luna unpack why small caps are suddenly leading—and what it means for the Fed's next move. With the federal funds rate stuck at 3.64 percent and core CPI still creeping up, the market is betting that rate cuts are coming, but the data tells a different story. They drill into the mechanics: small caps are more sensitive to domestic growth and borrowing costs, and the recent yield curve dynamics are creating a tailwind. But if inflation doesn't cooperate, this rally could be fragile. A focused look at one of the most interesting divergences in markets right now.