Ed Yardeni expects first Fed rate cut in second half of the year, lists preferred US indices

Ed Yardeni, President of Yardeni Research does not expect a rate cut by the US Federal Reserve until the second half of the year. "I think the Fed recognises the economy's doing well enough. That if inflation continues to moderate that's a good thing. Why mess with success? So I think the Fed is not going to go for a rate cut in March, maybe not even in May."

He anticipates not more than two to three rate cuts through the year.

Yardeni said among US Indices, he prefers the S&P 600 for smallcaps and S&P 400 to Russell 2000 index. “There are a lot of companies in the Russell 2000 that lose money and that is nothing new. And so, I prefer to invest in companies that have earnings, and for the small caps and mid-caps, it’s better off looking at an index like the S&P 600 for the small caps and S&P 400 for the mid-caps,” he said.