When short-term interest rates spike, small and mid-cap stocks tend to underperform benchmark indices like the S&P 500. Why? Let's break it down:

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While the Federal Reserve may hold tight on cutting interest rates because of sticky inflation, experts predict a string of rate cuts within the next 12 to 18 months. These rate cuts could serve as a powerful catalyst for smaller companies that lean on loans to expand their operations.

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Source Fool.com