A relatively resilient economy, along with stubbornly high inflation and weaker credit market conditions, lays out a difficult path ahead for the Fed. Amid an uncertain macro environment, investing in fundamentally sound, dividend-paying stocks Amgen Inc. (AMGN – Get Rating), Kimberly-Clark Corporation (KMB – Get Rating), and OneMain Holdings, Inc. (OMF – Get Rating) could be wise for stable returns.
Inflation remained stubbornly high in April. The Commerce Department reported that the core Personal Consumption Expenditures (PCE) price index rose 0.4% for the month, surpassing the 0.3% Dow Jones estimate.
On an annual basis, the gauge increased by 4.7%, exceeding expectations by 0.1 percentage point. The current levels remain significantly above the Federal Reserve’s 2% inflation target.
Despite the high-interest rate environment and elevated inflation, April’s spending figures reveal that consumers have persisted in their expenditures, mainly supported by a personal income increase. Consumer spending increased by 0.8%, while personal income accelerated by 0.4%.
Recent economic data showing persistent inflation alongside robust consumer spending could tempt the central bank to raise the federal funds rate further next month when a pause was on the table earlier.
Considering this macroeconomic backdrop, it could be wise to invest in dividend stocks as a defensive strategy for one’s portfolio. Therefore, fundamentally sound, dividend-paying stocks…
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