In December 2024, the Federal Reserve reduced interest rates by 25 basis points during the Federal Open Market Committee (FOMC) meeting, bringing the target range to 4.25%–4.5%. This move underscores the Fed's dedication to its dual mandate of promoting maximum employment and maintaining price stability.
Small-cap stocks can be particularly attractive during periods of interest rate cuts due to their growth-oriented nature and sensitivity to economic changes. Lower rates reduce borrowing costs, enabling these smaller companies to invest in expansion and innovation more affordable.
