The Federal Reserve’s (Fed) pivot from aggressive rate hikes to rate cuts is creating what one portfolio manager calls a “headwind to tailwind” shift for mid-cap stocks, potentially unlocking gains for companies that have already proven they can survive in a tighter monetary environment. Amy Y.
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While it may not be anything like the 7% to 8% inflation rate of 2022 and 2023, the consensus view is that inflation will remain above the Federal Reserve’s preferred 2% target for some time to come. That makes dividend stocks more attractive, particularly those with yields that outpace the rate of inflation.
2026 is well underway and off to a bullish start. The S&P 500 and other major indices are ending January at record highs, and the Russell 2000 INDEXRUSSELL: RUT, which tracks small-cap stocks, is leading the charge.
Carnival is at levels last seen before the pandemic recession. Other stocks at new highs include TD Synnex, Gates International, and Belden.
