Navigated to Market Rotation Meets Fed Rate Cuts

Market Rotation Meets Fed Rate Cuts

September 18
1 hr

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Episode Description

Show from 09/19/25

Host Jeremy Schwartz is joined live from Mallorca by Pierre Debru, Head of Research at WisdomTree Europe, to explore shifting investor sentiment across the continent. Pierre discusses how European investors are reallocating away from the US and toward domestic equities and thematics like defense, nuclear, and rare earths, fueled in part by a weaker dollar. He outlines the renewed interest in defense investing spurred by NATO's 5% GDP spending target, as well as the long-term outlook for Europe’s political and fiscal stability across markets like Greece, Poland, and Italy. The conversation covers capital efficiency, the need for diversification through gold and crypto, and the rise of thematic exposure to quantum computing and AI-related infrastructure. (30:17) Professor Siegel and Kevin Flanagan join to analyze the Fed’s latest 25 basis point rate cut. Professor Siegel emphasizes the strength of the consumer, upward revisions to GDP forecasts, and unity within the Fed despite differing views reflected in the dot plots. He critiques the current path of policy, pointing to lingering inflation concerns from tariffs and the need for further rate cuts amid signs of softening in the labor market. Siegel also discusses falling mortgage premiums, the resilience of housing and business investment, and how investment incentives and AI are likely to benefit small-cap firms over time.

Pierre Debru on LinkedIn: https://www.linkedin.com/in/pierre-debru/

Kevin Flanagan on LinkedIn: https://www.linkedin.com/in/kevin-flanagan-wt/

WisdomTree: https://www.wisdomtree.com/investments
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