The Federal Reserve is mispricing interest rate expectations and will remain on hold rather than hike further, which would provide relief for small-cap companies burdened by floating-rate debt.

"A second straight cool inflation reading and a wave of upbeat bank earnings pushed the Dow and small caps higher by midday Wednesday... The small-cap Russell 2000 outperformed, rising about 0.2%"

"Urbanowicz believes macro relief is coming because the broader market is actively 'mispricing the Fed.' While investors have priced in an additional interest rate hike by the end of this year due to tough central bank rhetoric, Goldman Sachs expects a softer macroeconomic reality to keep the Fed strictly on hold."