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Income Investing

Income Investors: Don’t Fear the Fed

By Roger S. Conrad, on Jan. 28, 2017

It looks like they’re serious this time.

The Federal Reserve announced the end of quantitative easing way back in May 2013. Since then, despite a pledge to “normalize” monetary policy, the central bank has raised the federal funds rate only twice. But with unemployment at post-2008 financial crisis lows and the Trump administration promising an expansionary fiscal policy, Fed Chairman Janet Yellen is now talking about multiple rate boosts “over the next several years.”

We’ve heard this kind of talk before. And given the recent record, it’s easy to envision a change in economic conditions that causes the Fed to switch gears yet again.

At this point, however, odds of a significant boost in interest rates over the next few years are high enough for investors to pay attention. And that goes double for income seekers who depend on their portfolios’ dividends and interest to pay bills.

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