I think people may be jumping the gun on interest rates and small caps. Say they reduce by 0.25 in July on the first cut (which likely wont be till Sept) … then they wait 6 weeks till next meeting to see if they cut again another 0.25 in Sept (or December) So borrowing money is now 6% to 6.5% instead of 6.5% to 7% … Isnt it still gonna be a higher rate than most want to pay?
This will be a gradual reduction in the rates … may take a full year to get rates low enough to where most businesses that are avoiding loans now due to higher rates start wanting to take out loans if they can avoid it. Maybe longer. So wont that mean that we really arent gonna see a whole lot of growth in many of these small cap companies due to lower interest rates for a couple years at least?
Same with mortgages … Im not taking out a new mortgage until rates get closer to 3.5%-4% … that is gonna take many cuts to get there. Likely gonna be a 2 year process I bet.
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