At the turn of the year, the market was banking on six rate cuts beginning in March. Advertisement"The valuation ratio from small caps to large caps right now is at a 24-year low. This is probably one of the best entry points into small and mid-cap stocks," Ewing said. He added that when the Fed starts cutting rates, small caps have historically outperformed. Morningstar holds steady to its expectation of two rate cuts of 25 basis points each for 2024.

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Persons: Jerome Powell, James St . Aubin, Brett Ewing, you've, we're, Ewing, haven't, David Sekera, Russell, Sekera Organizations: Service, Federal, Market Committee, Sierra Funds, Fed, Morningstar