Should You Buy AGNC Investment Ahead of Federal Reserve Interest Rate Cuts?
With inflation mostly back under control, the Federal Reserve's attention has shifted toward the labor market, where the unemployment rate has inched higher in the past few months as job creation numbers slow.
Last month, the unemployment rate triggered the "Sahm rule," which says when the three-month average of the unemployment rate rises half a percentage point above its low over the prior 12 months, the country is headed toward a recession. With that backdrop, the Federal Reserve has signaled that it is ready to cut interest rates for the first time since 2020.
AGNC Investment (NASDAQ: AGNC) is one stock burdened by the higher-interest-rate environment. The mortgage real estate investment trust (mREIT) pays an appealing 14% dividend yield, but the stock price has plummeted 32% since early 2022 when the Fed first began its interest rate hiking cycle. With the CME Group's FedWatch tool projecting up to 1.75 percentage points worth of rate cuts over the next year, is now the time to scoop up AGNC Investment stock?
Source Fool.com
