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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