Part 5/9:
Opportunities for Smaller Companies and Emerging Markets
Lower interest rates can benefit smaller companies by reducing their borrowing costs, enabling expansion without the burden of expensive debt. This can enhance shareholder value as these firms leverage cheaper capital to grow.
On the global stage, falling US rates can make emerging markets more attractive. Since many emerging market debts are denominated in USD, a weakening dollar—common when US rates decline—eases repayment risks for these countries and companies. Consequently, investors perceive emerging markets as potentially more stable and rewarding under these conditions, especially when supported by strong governance and economic stability.