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Fed Rate Cuts Give Higher Probability Of The Great Rotation Occurring

Despite pullbacks and elevated volatility in the earlier days of the month, major equity indices were up in August amid easing inflation, a dovish change in monetary policy, and increased probabilities of a soft landing.

At this year’s annual Jackson Hole symposium, Federal Reserve Chairman Jerome Powell expressed a dovish stance. “The time has come for policy to adjust,” he stated, all but confirming the Fed is ready to start cutting interest rates.

We think the mid-cap/smaller-cap space offers an attractive return per unit of risk on a forward-looking basis as the interest rate cycle begins to take effect.

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This post appeared first on ETF Trends.