The definition of insanity is doing something over and over again and expecting different results.
If that's the case, a picture of our Federal Reserve should stand beside the term "insanity" in the dictionary.
This week, U.S. Federal Reserve Chair Jerome Powell will offer his semiannual testimony before Congress. During his talk, he'll likely discuss the Fed's three interest rate cuts in 2019 and the possibility of another rate cut in 2020.
According to CME FedWatch, the markets now expect the U.S. central bank will cut interest rates yet again this year.
The probability of one cut now sits at 58.5%. The odds of two cuts of 25 basis points have risen to nearly 15%.
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For investors looking to generate income, they aren't finding much help in the bond markets. The U.S. 10-year bond is well under 2%, and further rates would reduce payouts.
Investors should consider assets like real estate investment trusts (REITs) that benefit from lower rates and can produce huge yields thanks to their favorable tax structure and stable cash flows.
The REIT I have for you today is paying an impressive 8.2% dividend yield. Try finding that type of yield anywhere else in the market…
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.