The FED cuts 25 bps and signals fewer cuts in 2025 than previously anticipated. Now, the market will attempt to price in this new outlook. Short-term headwinds are likely for all risk assets. I feel like small caps will get slaughtered the most, as they are the most sensitive to high interest rates.
Discussion
Fed is signaling higher for longer .. and a stronger dollar ?
US Rates Future now implies just 37 bps of cuts in 2025, down from 49 bps right after the FED statement.