The yield on the 10-year Treasury note moved back above 5% after the Federal Reserve raised interest rates, according to Motley Fool coverage of the move. Another increase is expected as soon as October.
Higher long-term yields raise borrowing costs across the economy and typically pressure the valuations of growth stocks, while making income-oriented investments such as high-yield dividend payers more competitive with bonds. The move has renewed attention on dividend stocks that have a long history of raising payouts, including at least one payer cited in Fool coverage that has raised its dividend 136 times since 1994.
What is unresolved is how much further the Fed intends to raise rates this cycle and whether inflation data will support or undercut the case for the additional October increase already being flagged by markets.