Need More Income? Don’t Expect the Fed to Help You This Month. But You CAN Find Places to Turn.

The place: Jackson Hole, Wyoming

The dates: Aug. 26-28, 2021

The topic: “Macroeconomic Policy in an Uneven Economy”

The participants: U.S. central bankers, economists and various other policymakers

This upcoming mountain town get-together is like Woodstock for Wall Street and Bonnaroo for the bond market. But for income investors, this annual gathering is set to deliver the same old refrain. I predict these will be the two key verses:

1. The Fed will continue to let inflation run higher.

2. It will continue to tiptoe around tapering the $120 billion it currently spends each month buying fixed assets to support the economic recovery.

For Wall Street and bond market types, this upcoming get-together is like Woodstock and Lollapalooza all rolled into one.

Which means we already know the chorus by heart:

Finding decent income and decent yields will continue to be a massive headache!

I will keep doing my best to help you fight back in this zero-rate world. That starts with decoding this event and why it’s so important.

No Ordinary Mountain Retreat

Jackson Hole is a valley town between two mountain ranges, the Gros Vetre and Tetons.

The Federal Reserve Bank of Kansas City has hosted an economic and policy pow wow at Grand Teton National Park since 1978.

Grand Teton National Park Source: national-park.com

Amid the 13,000-foot peaks and prairie lands of Wyoming, dozens of domestic and foreign participants gather to discuss economic issues, policy moves and market developments.

It may not sound like the most exciting way to spend a few days. But over the years, policymakers have used the symposium to break big news.

Markets have reacted in kind, with major swings in currencies, interest rates, and stocks often following.

Here’s What You Can Expect …

Next Thursday, Fed Chair Jay Powell will deliver his remarks at this year’s event — and the timing is interesting.

Some Fed speakers have indicated they want to dial back the current $80-billion per month Treasury-buying program and the $40 billion it spends every month on mortgage-backed securities.

Others have signaled concern about keeping policy so easy despite much-improved job market data and higher inflation readings.

Now, Wall Street Gets Clues About What Powell Thinks

Does he want to cut back on bond buying? If so, when will the Fed start and how long will the process take?

What about interest rates? When does he think the Fed should start raising them?

… And What NOT to Expect

Me? I’ve told you before that this Fed has shown little inclination to rock the boat on Wall Street.

If anything, it’s even more beholden to, and focused on, Wall Street than the Fed was under previous chairs Janet Yellen and Ben Bernanke.

Even IF Powell were to suggest a tapering will start later in 2021, or more likely in 2022, I don’t believe he’ll touch the “third rail” of interest rates. Instead, he’ll underscore at the symposium that they’re going to stay pegged near zero for ages.

My job isn’t to tell you whether that’s the “right” or “wrong” approach. It’s to tell you what to do about it. And on THAT front, I couldn’t be clearer.

You simply have to take steps to boost the income and yield your portfolio spins off.

That means focusing on higher-yielding, higher-rated stocks and exchange-traded funds (ETFs) that help you generate market-beating income. It also means learning about other strategies like options selling, which can help you generate income infusions as often as every week.

To help you on both fronts, I’ll be hitting the road for two key events ...

1. First, I’m speaking at the MoneyShow Las Vegas. The conference runs from Sept. 12 to 14 at the Bally’s/Paris Hotel. This link has all the details on my presentations as well as information on how to register.

2. Second, I’ll be participating in the 47th annual New Orleans Investment Conference. It’s scheduled for Oct. 19-22 at the Hilton New Orleans Riverside in the heart of the Crescent City.

This long-running event features a dynamite lineup of speakers, seminars and exhibit hall booths. You can read more about all of them ... and get registered to attend ... by clicking on this link.

I sincerely hope you can join me at one or both of these conferences. And, of course, you can continue to find additional guidance and suggestions on how to beat the income drought right here.

Because I know from your comments that greater income is something you’re continuing to search for high and low — even if Powell probably won’t give you any help on that score later this month.

Until next time,

Mike Larson