According to the Bureau of Labor Statistics, the consumer price index increased 8.3% in April, exceeding Dow Jones’ 8.1% estimate. Fed Chair Jerome Powell stated that the Fed is determined to implement aggressive interest rate hikes until inflationary pressure comes down. These factors, coupled with the Russia-Ukraine war, have contributed significantly to heightened stock market volatility. This is evident in the CBOE Volatility index's 72.1% gains year-to-date.
Furthermore, Goldman Sachs economists have set the odds of a recession at 35% within the next two years. Amid the current scenario, high-yielding dividend stocks are considered attractive investments because they help hedge one’s portfolio against market fluctuations and generate a regular income stream. Investors’ interest in dividend stocks is evidenced by iShares Core High Dividend ETF’s (HDV) 7.3% gains over the past six months.
