Fed’s Split Rate Cut Puts Fresh Focus On Small-Cap, Mid-Cap And Bank ETFs - Avantis U.S. Small Cap Value ETF (ARCA:AVUV), Pacer US Cash Cows 100 ETF (BATS:COWZ)

Group 1 - The Federal Reserve is experiencing an unusual three-way division regarding interest rate decisions, which has implications for various sectors within the ETF market [2][3] - The Fed reduced the federal funds rate by 25 basis points to a range of 3.5%-3.75%, reflecting internal disagreements among rate setters, marking the first three-way dissent since 2019 [2] - The Fed's GDP forecasts have been upgraded for the coming years, while unemployment and inflation forecasts remain stable or slightly reduced, indicating a cautious outlook [3] Group 2 - Value, financial, and cash flow ETFs are highlighted as areas of interest due to the current economic conditions and Fed's policy stance [4] - Smaller-cap stocks, such as those in the Avantis U.S. Small Cap Value ETF, are expected to gain attention as GDP forecasts improve from 1.8% to 2.3% for 2026, suggesting a focus on undervalued, locally oriented businesses [5] - Banking ETFs, like the SPDR S&P Bank ETF, are likely to remain relevant as interest rate forecasts and credit market dynamics evolve, particularly with the Fed's moderate stance for 2026 [5]