"In addition, if the January consumer price index number, to be posted on Friday, comes in below expectations, there may be no rate cuts until the summer, if then. The best move for growth and income investors seeking solid passive income is to start adding top companies now, as interest rates will rise with no help from the Federal Reserve."
"The basic trade-off: When interest rates are high, "safe" investments like Treasury bonds, CDs, and money market funds offer decent returns with virtually no risk. For example, if you can get 5% guaranteed from a Treasury bond, why take on stock market risk? Why high-yield stocks compete better: Ultra-high-yield stocks (often paying 7-10%+ in dividends) become relatively more appealing because:"
January non-farm payrolls far exceeded expectations, prompting Wall Street to cut expected rate cuts from 2.5 to 2 and raising the possibility that CPI could delay cuts until summer. If rate-cut hopes fade, interest rates will likely remain higher for longer, sustaining better yields on safe instruments like Treasuries, CDs, and money market funds. Ultra-high-yield dividend stocks (often 7–10%+) gain appeal because the income premium over bonds compensates for equity risk, retirees need higher cash flow if bond yields stay moderate, and investors shift from growth toward 'get paid while you wait' strategies. Adding quality, high-yield companies now suits income-focused portfolios.
Read at 24/7 Wall St.
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