Markets got a jolt last week after Federal Reserve Chair Jerome Powell signaled that a rate cut may be coming soon. Speaking at Jackson Hole, Powell noted that “downside risks to employment are rising,” and hinted that monetary policy will need to adjust. Traders took him at his word—the Dow soared over 800 points on the day, and futures markets now assign more than a 90% chance of a September rate cut.
For investors who rely on steady income, this shift is far more than a headline. A falling-rate environment can reshape the relative appeal of bonds and dividend-paying stocks, altering how portfolios generate both income and total return. Let me explain.
This post originally appeared at Investing Daily.