42 MacroPublished 2026-09-30
“The Macro Minute: Are we at peak good news regarding inflation?”
$VTNo side taken
VT's mid- and small-cap components face near-term pressure from rising rates and a stronger dollar, but potential policy intervention may drive their outperformance relative to the S&P 500 in 2027.
This one was titled: "VT, will all mid- and small-caps harm or help in the long run?" It appears that the recent interest rate rise is placing a heavier burden on mid- and small-caps in VT compared to the S&P 500.
How significant will this be for the future? That is unlikely to be the case. VT is the broad global stock market index. This is weighted based on market capitalization, just like the S&P 500.
What really puts those stocks under pressure is the fact that we are dealing with a rise in the US dollar, a rise in the risk premium, and a rise in interest rates; and those factors generally weigh more heavily on cyclical sectors such as international equities, other regions, as well as small and mid-caps.