After hiking rates at their fastest pace in four decades - and then keeping them “higher for longer” - it seems that the Federal Reserve is finally getting ready to cut interest rates, with expectations for a September rate cut gathering momentum. The central bank kept rates unchanged for the sixth consecutive meeting in June, and is widely expected to do so again this month - but the CME FedWatch Tool points to 94% odds for a much-anticipated cut in September.
With inflation trending lower amid signs that the labor market is cooling off, the case for a rate cut is becoming even stronger. That's good news for small-cap stocks, which tend to rely more heavily on floating rate financing to fuel growth.
