With heightened global market uncertainties this year, the Federal Reserve has hinted the U.S. could be in for an extended low-rate environment. Consequently, yield-starved investors may consider alternative income-generating assets, like preferred stocks and related exchange traded funds.
On Tuesday before Congress, Federal Reserve Chairwoman Janet Yellen urged caution on the the interest rate hike path, especially ahead of the United Kingdom’s referendum on whether or not it will remain within the European Union, citing “economic consequences that would be relevant to the U.S. economic outlook.”
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Moreover, Yellen signaled that the Fed may not be want to be caught off guard by weak growth again – the central bank was seen as too trigger happy when it first hiked rates last December ahead of slowing domestic growth and international uncertainties, such as concerns over faltering Chinese growth and a plunge in oil prices. With some lingering international troubles, Yellen indicated that the Fed sees no pressure for raising rates soon.
Before firing off another interest rate hike, the Fed will wait on improving U.S. economic growth, strengthening employment numbers and no negative shocks from a Britain June 23 referendum. Fed officials will meet again on July 26, 27.
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