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Citigroup suggests small-caps as hedge against a potentially hawkish Fed

The strategy is aimed at buffering investor jitters if the Federal Reserve takes a more hawkish stance than markets expect.

Reported · Written up by our desk · Sectors

MarketWatch reports that Citigroup strategists are looking for ways to protect portfolios from potential turbulence around the Federal Reserve's next move.

The bank's approach focuses on small-caps as a potential “weapon” against jitters tied to the risk of a more hawkish Fed, according to the report.

MarketWatch frames the idea as a trade tied to Fed expectations, with the goal of reducing downside risk during shifts toward tighter policy signals.

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