It’s likely a good bet that the Federal Reserve will raise the federal funds rate by 25 basis points (1/4 of 1%) in September. Fed Chair Kevin Warsh sparked a rift among the Federal Reserve Governors when rates were held steady last month. If the Consumer Price Index and the Producer Price Index for July come in hot next week, that will almost guarantee a rate hike.
While the bond market will not be thrilled, owners of high-yielding energy stocks may fare better, as they yield more than government bonds and have upside potential, especially as power demand rises amid the acceleration of data center computing.
The way to play this from a total-return angle is to focus on…
This post originally appeared at 24/7 Wall St.