Friends - I own an S&P 500 index fund, which has been yielding around 2% per year. Not great, but good enough for me. Given that the Fed has been reducing interest rates over the past few months, what impact does this have on the dividend yield of the S&P 500 index? And what would happen to the S&P 500's dividend yield if the Fed lowers rates to zero or goes negative? Can we still count on the 2% dividend yield of the stock market? Or will that drop as well? I'm not sure of the correlation between the Fed's rate and the stock market's yield. Would love to hear what the smart folks here know about this. Thank you.
Answers
I know I had few stocks that are growth but in past few months have decided to put capital into repurchase stock making me think that they think there is going to be stagnant growth coming or recession. As interest rates have fallen I've also had notes redeemed on me cause they figured why pay me if they could call an if need be reissue at a lower rate. Showing me companies are buckling down with the uncertainty that is out there.