US SMEs seen to bear brunt of rate hikes

THE US Federal Reserve turned off the music, and now there are clearer signs that the stock party is well and truly over.

Twenty-four hours after the Fed played party pooper by effectively vowing to end to all market- friendly policies, the Russell 2000 index of small caps slipped into bear-market territory, closing last Thursday (Jan 27) at more than 20 per cent below its 2021 peak.

The Russell is the index most strongly associated with US economic prospects because its constituents are more domestic than multinational in scale and focus.