But if you simply target the fattest dividend yields and call it a day, you're in for a rude awakening.

There's a reason risk is so often mentioned alongside reward. A stock offering several times more yield than the market average might very well be the undiscovered can't-miss stock pick of the year … or it might be flashing a signal that many investors have passed it up for a reason. And sure, a very high yield can help make up for some underperformance in the stock price—but only if the dividend continues to be paid. Some high-dividend stocks have unsustainable payouts that are just an earnings miss or economic downturn away from collapse.

I'm not saying you should run screaming from any stock that offers an outsized payday. I'm just saying you shouldn't buy them on yield alone. Quality matters, too.

Today, I'll examine a group of high-yield dividend stocks that are showing more signs of fundamental quality than most. Not only do they deliver much sweeter yields than your average stock, but they also have the confidence of Wall Street's analyst community.

Editor's Note: Tabular data presented in this article is up-to-date as of Aug. 19, 2026.

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Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Dividend Yields (And Dividend Safety)

Dividend yield is a simple calculation: annual dividend / price x 100. But this humble calculator crunch can mean a world of difference for investors, especially those reliant on income.

Let's say you have a $1 million nest egg heading into retirement. If your portfolio yields 3%, you'll collect $30,000 in dividend and interest income each year. If it yields 6%, though, you'll collect $60,000—a dramatically higher number that would wildly alter your retirement calculus.

But dividend yields can be deceiving. You see, a company can get a very high annual dividend yield in two very different ways: the dividend growing very rapidly, or the share price falling very quickly. Here's an example:

Alpha Corp., which trades for $100 per share, pays a 50¢-per-share quarterly dividend, or $2 across the whole year. It yields 2.0%. In a month, however, it yields 4.0%. Here are two ways that could have happened:

1. Alpha Corp. doubled its dividend to $1.00 per share quarterly, good for a $4-per-share annual dividend. The share price stays the same. ($4 / $100 x 100 = 4.0%)
2. Alpha Corp. kept its dividend at 50¢ quarterly ($2 annually), but its share price plunged in half to $50 per share. ($2 / $50 x 100 = 4.0%)

Understand that a company's stock can plunge even if its financials are perfectly healthy; markets aren't always rational. But very broadly speaking, if you're comparing a company that just doubled its dividend to another company whose shares have been cut in half, you'd expect the former's dividend health to be better.

That's why you should always be mindful of dividend safety, but especially when it comes to high-yield dividend stocks. That's because oftentimes, the dividend is a more significant contributor to returns than price, so any danger to the dividend could undermine your investment thesis.

So, that's your goal: Determine whether the high-dividend stocks you buy are financially stable and can generate substantial profits and cash, which is how the dividend gets paid. Among other things, you'll want to look at payout ratio, which determines what percentage of a company's profits, distributable cash flow, and other financial metrics (depending on the type of stock) are being used to finance the dividend. Generally speaking, the lower the payout ratio, the more sustainable the payout.

How Does Dividend Growth Work?

Of course, yield is normally a function of what we know now—not how a business might change in the future. Many companies exhibit dividend growth over time.

There’s no universal rule about how companies might raise or reduce their payments, but generally dividend stocks tie these profit sharing plans to earnings growth.

In other words, if a company is making more profits, then they have more cash to spread around to shareholders. And if they hit a serious snag, there’s a chance dividends could be cut or eliminated to shore up finances.

What Is Yield on Cost?

When you look up a stock’s information, the dividend yield listed is based on the most recent dividend and the current stock price.

That yield is often actually different than the one current shareholders enjoy. That yield is called “yield on cost,” which is the payout based on what you paid, at the moment you invested.

Let’s say you buy a stock at $100, and it pays $1 per share. It yields 1.0% when you buy it ($1 / $100 x 100 = 1.0%).

In a year, that stock has doubled to $200 per share, and it also doubled its dividend to $2 per share. If you look up its information, its dividend is still 1.0% ($2 / $200 x 100 = 1.0%).

That’s not your yield on cost, however. You’re still receiving that higher dividend of $2 per share. But your cost basis is still the original $100 you bought the share at. So now, your yield on cost has doubled, to 2.0% ($2 / $100 * 100 = 2.0%)!

Related: 9 Best Fidelity Retirement Funds [Low-Cost + Long-Term]

8 High-Yield Stocks That Wall Street Analysts Love

Today, I'm going to look at several high-dividend stocks. All of them yield more than 5%—a level that's more than four times what the S&P 500 offers currently, and that's well above most traditional high-dividend ETFs. And several pay out much more than 5%, resulting in an average dividend yield of more than 9% across this list!

Every stock on this list also has a favorable view from Wall Street's analyst community. The consensus analyst rating, courtesy of S&P Global Market Intelligence, is the average of all known analyst ratings of the stock, boiled down to a numerical system where …

• Less than 1.5 = Strong Buy
• 1.5-2.5 = Buy
• 2.5-3.5 = Hold
• 3.5-4.5 = Sell
• More than 4.5 = Strong Sell

In short, the lower the number, the better the overall consensus view on the stock. In the case of this list, I've included only stocks that have received a 2 or lower—in other words, clear-cut Buys in the analysts' eyes.

Importantly: These are the best dividend stocks among companies that pay pretty high yields, but that doesn't make any pick here a no-brainer slam dunk. They all have a blemish or two—whether it's significant stock weakness of late, interest-rate risk, tight dividend coverage, or something else—but to the pros, at least, their high yields, relative value, and/or growth potential make the risk worth taking. So if you're going to jump into high-yield investing, just make sure you do so with your eyes wide open.

Stocks are listed in reverse order of dividend yield, from the lowest-paying stock to the highest.

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8. UMH Properties

• Industry: Manufactured homes REIT
• Market capitalization: $1.4 billion
• Dividend yield: 5.4%
• Consensus analyst rating: 1.67 (Buy)

UMH Properties (UMH) is a real estate investment trust (REIT) that specializes in manufactured home communities. Its portfolio currently boasts 145 communities  spanning 27,100 developed homesites located across a dozen states across the eastern half of the United States. Around 11,200 of those sites contain rental homes. It also owns more than 1,000 self-storage units and 2,400 acres of land for the development of new sites, and it has an ownership interest in and operates a pair of its portfolio communities through a joint venture with Nuveen Real Estate.

Related: 7 Best Closed-End Funds (CEFs) Paying Us Up to 16%

Like with many residential REITs, UMH Properties has come down hard from highs hit during the exuberant post-COVID run-up in 2021 and 2022. Still, this real estate name has delivered uninterrupted annual top-line growth for more than a decade now. Funds from operations (FFO, a vital REIT profit metric that also speaks to dividend coverage) hasn't been as consistent but has generally been on the rise since the late aughts.

Wall Street is generally favorable on UMH, with seven Buy calls from the analyst set against just two Holds and no Sells. The company's most recent earnings report helped keep spirits high:

Related: The 9 Best Dividend Stocks for Beginners

"The more detailed results from [the second-quarter] earnings disclosure did provide some updates we would view as incrementally positive," B. Riley Securities analyst John Massocca says. Those figures included continued reacceleration in single-property net operating income (SPNOI) growth, as well as a higher percentage of total revenues generated from rental income rather than home sales compared to B. Riley's expectations. "We think this bodes well for the stability of future results," Massocca says, "given rental income has tended to be steadier vs. the often seasonal and somewhat variable operating income from selling new manufactured homes.

Also providing some lift of late has been prodding from activist investor Erez Asset Management, which owns 4.7% of UNH and recently said it plans to raise its stake to 5%. He's pushing the company to explore strategic alternatives including a potential sale.

Why is UMH among the market's best high-yield dividend stocks? In addition to glowing opinions from Wall Street's pros, recent declines have pushed its yield past the 5% mark. It is worth noting, however, that the company has so far in 2026 failed to raise its quarterly dividend after years of mid-single-digit improvements.

Related: 14 Best Investing Research & Stock Analysis Websites [2026]

7. Alpine Income Property Trust

• Industry: Net-lease REIT
• Market capitalization: $348.3 million
• Dividend yield: 6.1%
• Consensus analyst rating: 1.73 (Buy)

Alpine Income Property Trust (PINE) is another REIT, this one specializing in single-tenant "net-lease" properties. Its portfolio of 128 properties in 31 states is leased out to retailers, pharmacies, grocery stores and more—tenants include Lowe's (LOW), Dick's Sporting Goods (DKS), Walmart (WMT), and Best Buy (BBY).

Net-lease arrangements are different from traditional leases. They typically require tenants to be responsible for taxes, insurance, and maintenance—thus, all rent is "net" of those expenses. As a result, net-lease REITs' results tend to be a little more regular and predictable compared to traditional REITs.

It also has a portfolio of mortgage originations, which it can use to bolster its income, but it's a higher-risk, lower-quality business.

Related: 15 Dividend Kings for Royally Resilient Income

"[Alpine Income Property Trust has] a favorable portfolio composition relative to peers in terms of both retail real estate and investment-grade tenant exposure," B. Riley Securities analyst John Massocca writes. "A more dovish interest-rate environment should be a positive given the REIT's current floating-rate exposure and near-term refinancing needs. Improvements in the cost of debt capital could also help offset the impact of expected high-yield loan investments maturing in the next few years."

Massocca, who reiterated his Buy call after the company's Street-beating earnings report in late July, is one of eight Buys on the stock, versus three Holds and no Sells.

PINE has been dutifully raising its dividend since coming public in 2019. The most recent hike, in February 2026, put the distribution at 30¢ per share, which annualizes to a yield of more than 6% at current prices.

There's naturally higher risk just given Alpine's small size relative to most of the other names on this list, but its yield and growing business put it among the best high-yield dividend stocks to buy now.

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6. Energy Transfer LP

• Industry: Energy midstream
• Market capitalization: $72.9 billion
• Distribution yield: 6.4%*
• Consensus analyst rating: 1.43 (Strong Buy)

Energy Transfer LP (ET) is one of the continent's largest midstream energy firms. The Dallas-based MLP's assets include roughly 140,000 miles of energy pipelines and other infrastructure across 44 states, and it's responsible for transporting and storing crude oil, natural gas, NGLs, and refined products. Its additional assets include Lake Charles LNG Company; incentive distribution rights from, and a 15% stake in, Sunoco LP (SUN); and a 32% stake in USA Compression Partners LP (USAC).

"We continue to favor ET's dominant energy infrastructure footprint and believe the partnership is well positioned to grow over the last several years," say Stifel analysts Selman Akyol and Timothy O'Toole, who rate Energy Transfer's units at Buy. "While capital expenditures will likely remain elevated in the near-term, we believe ET can maintain an attractive financial position and continue to modestly grow its distribution. We believe investors will be well served by owning ET as demand for U.S. energy increases around the globe."

Related: 10 Best Dividend Mutual Funds You Can Buy Now

UBS analyst Manav Gupta (Buy) is also optimistic about Energy Transfer development projects such as its expansion in America's Southwest. "Desert Southwest will provide reliable economic supplies of natural gas to support the long-term energy needs for utilities and energy providers in the region driven by population growth, high-tech industry demand and data center expansion," he says.

This promise has 19 of ET's 21 covering analysts in the Buy camp. The two dissenters call ET a Hold.

As for the distribution? For those who don't remember, Energy Transfer chopped its payout in half in 2020 during the depths of COVID. However, it started a quarterly distribution growth streak in 2022—one that has persisted even after it surpassed post-COVID distribution levels in late 2023.

Related: The 13 Best Mutual Funds for the Rest of 2026

Energy Transfer says it's committed to growing the distribution even more going forward, though it's taking an understandably cautious approach, targeting 3% to 5% annual growth. Distribution coverage is plenty adequate; estimates for distributable cash flow are just a little less than twice what it needs to afford its payout.

You'll probably notice that I've been using some unfamiliar terminology. That's because ET is a master limited partnership (MLP), which trades like a stock but is internally organized differently. It also uses a few different terms. For instance, shares are "units," and it pays a dividend-esque "distribution" that can be something of a hassle from a taxation standpoint, especially for novices.

* Distribution yield is calculated by annualizing the most recent distribution and dividing by unit price. Distributions are like dividends, but they are treated as tax-deferred returns of capital and require different tax paperwork.

Related: 8 Low- and Minimum-Volatility ETFs for Peace of Mind

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5. CTO Realty Growth

• Industry: Retail and mixed-use REIT
• Market capitalization: $825.8 million
• Dividend yield: 6.9%
• Consensus analyst rating: 1.00 (Strong Buy)

CTO Realty Growth (CTO) is a retail-oriented REIT that holds a tight portfolio of 21 properties spanning 5.8 million square feet across seven Southeast and Southwest states. It also owns a roughly 13% interest in the aforementioned Alpine Income Property Trust.

It divides its portfolio into three types of properties: grocery-anchored retail, retail "power centers," and retail-focused lifestyle and mixed-used properties. Its properties are also located in and near affluent areas, many of which are benefitting from booming population growth. The portfolio average household income within five miles is $137,000.

Related: 10 Best Schwab ETFs to Buy [Build Your Core for Cheap]

CTO Realty Growth has actually existed in one form or another since 1902, and it has been paying dividends for more than half a century. But it really put the pedal down on dividend payments when it converted into a REIT in early 2021. The company paid 12¢ per share across 2019; in 2025, it paid $1.52. The stock has largely responded, delivering a total return (price plus dividends) of 135% since Feb. 1, 2021, versus just a bit more than 40% gains for the REIT benchmark.

The few analysts who cover CTO Realty Growth see more good times ahead. Indeed, they're unanimously bullish—all five call the stock a Buy. Thus, while CTO shares don't have the largest dividend on this list, they're easily the best-rated of our high-yield dividend stocks.

But the dividend is still high and in great shape. CTO recently provided full-year 2026 adjusted FFO (AFFO) guidance of $2.21-$2.25 per share, which would easily cover the company's $1.52 in annual distributions.

4. Rithm Capital

• Industry: Mortgage REIT and alternative asset management
• Market capitalization: $5.8 billion
• Dividend yield: 9.6%
• Consensus analyst rating: 1.36 (Strong Buy)

Most REITs that you read about tend to be "equity REITs," which deal in physical real estate. Specifically, they own (and sometimes operate or manage) properties, whether that's apartments, office buildings, hotels, warehouses, you name it.

But "mortgage REITs" deal in paper real estate. That typically takes the form of residential and/or commercial mortgages, as well as mortgage-backed securities (MBSes). An mREIT will borrow money at short-term interest rates. It will take that money and buy mortgages, MBSes, and/or other mortgage-related securities. It will then earn income from the interest generated by these products—and use much of this profit to pay dividends to its shareholders. In fact, mREITs tend to have higher dividend yields than their traditional real estate cousins.

Related: 11 Best Investment Opportunities for Accredited Investors

Rithm Capital (RITM) is technically a mortgage REIT, though it looks much different than the other mREITs that appear later in this list. This "hybrid" mREIT has numerous businesses, including alternative asset management. RITM invests in residential mortgages loans, consumer loans, single-family rentals, mortgage servicing rights (MSRs), residential transitional loans, secured lending and structured products, and commercial real estate.

Ever since the 2020 financing crisis, the company has transformed its business model, growing its mortgage servicing business while also acquiring a variety of debt-related investment opportunities. It continues to be acquisitive, too, completing deals to acquire an alternative asset manager (Crestline Management) and an owner-operator of Class A properties (Paramount Group) in December 2025.

"We believe RITM remains a best-in-class REIT that has diversified its revenue streams and has consistently delivered strong earnings comfortably above its dividend," say Keefe, Bruyette & Woods analysts, who rate the stock at Outperform. "We think the company provides an attractive combination of strong current returns and upside optionality for its valuation to re-rate up as it continues to grow as an alternative asset manager."

Related: 5 Best Tech Dividend Stocks [According to the Pros]

The pros love the new-look RITM; every one of the 11 analysts covering the stock call it a Buy. And this year's weakness in shares has some of those analysts excited about Rithm's value proposition.

"The stock has been down lately due to growing concerns in the private-credit sector. However, we believe that the market is lumping alternative managers together and ignoring RITM’s other business lines," writes Argus Research analyst Kevin Heal (Buy). "It continues to grow its mortgage servicing business, refine its mortgage recapture process with recent partnerships while also taking advantage of new debt-related investment opportunities."

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3. Trinity Capital

• Industry: BDC
• Market capitalization: $1.7 billion
• Dividend yield: 11.3%
• Consensus analyst rating: 1.78 (Buy)

Trinity Capital (TRIN) belongs to another high-yielding acronym industry: business development companies (BDCs).

Fun fact: Congress is actually responsible for the creation of real estate investment trusts, which were brought to life in 1960 with a mandate to return at least 90% of their taxable income back to shareholders as dividends (in exchange for favorable tax treatment). Well, 20 years later, in the hopes of spurring investment in smaller businesses, Congress went back to the same playbook and created BDCs—with the same dividend mandate.

Trinity is an alternative asset manager that focuses on five specific business verticals: technology lending, equipment financing, life sciences, asset-based lending, and sponsor finance.

Loans make up the majority (75%) of the portfolio by investment type, and floating-rate loans make up a large (82%) and growing percentage of that part of the debt portfolio. Another 14% is made up of equipment financings, and the rest is equity and warrants. Its roughly 190 portfolio companies include the likes of launch service and spacecraft component provider Rocket Lab (RKLB), non-alcoholic craft brewer Athletic Brewing, and arthroplasty-focused medical device firm Shoulder Innovations.

Related: 7 Best Vanguard Dividend Funds [Low-Cost Income]

B. Riley Securities analyst Sean-Paul Adams has a Buy rating on shares, citing the company’s investment-grade rating from Moody’s, SBIC fund approval, record origination levels and increased equipment finance vertical demand.

"Record fundings of $619 million and platform assets under management of $3.2 billion (up 36% Y/Y) keep origination momentum and the fee platform as the primary earnings drivers, in our view," he says. "TRIN's strong yield, originations momentum, and platform expansion provide meaningful near-term upside potential, in our view."

Adams is one of seven Buy-equivalent ratings on the stock, opposed by just one Hold and one Sell.

Trinity’s sky-high dividend yield (currently more than 11%) is blunted a little bit by a lack of payout growth. The company came public in early 2021, and raised its dividend on a quarterly basis through the end of 2023, but it has kept that distribution level ever since.

That said, Trinity started 2026 by joining the ranks of monthly dividend stocks, so investors will be getting paid much more frequently now. That, as well as the mammoth payout and high ratings from analysts, are more than enough to put Trinity among the best high-yield dividend stocks to buy now.

Related: 5 Best Stock Recommendation Services [Stock Tips + Picks]

2. Ellington Financial

• Industry: Mortgage REIT
• Market capitalization: $1.8 billion
• Dividend yield: 11.4%
• Consensus analyst rating: 2.00 (Buy)

Ellington Financial (EFC) is a another mREIT that deals in not only residential and commercial mortgage loans and MBSes, but also consumer loans, asset-backed securities (ABSes) backed by consumer loans, collateralized loan obligations (CLOs), even debt and equity investments in loan origination companies.

Ellington stands out not only for its sky-high yield, but also its status as a monthly dividend stock. That's right: Ellington doesn't pay on a quarterly basis, but each and every month.

EFC's monthly dividend was actually reduced just a few months after its 2024 merger with Arlington Asset Investment Corp., from 15¢ monthly to 13¢, as it worked to absorb Arlington and as a 2022 acquisition, Longbridge Financial, attempted to return to profitability.

Related: 8 Best-in-Class Bond Funds to Buy

Good news on the latter front: Longbridge, a reverse mortgage business, has indeed returned to the black and actually looks attractive as some Baby Boomers choose to remain in their existing homes during retirement.

"We continue to believe a premium to book is warranted given the stable book value, growing mortgage banking businesses (Longbridge and Non-QM [LendSure]), and recent returns that have comfortably covered the dividend," write Keefe, Bruyette & Woods analysts Bose George and Frankie Labetti (Outperform), who note that home equity conversion mortgage-backed securities (HMBSes) market share reached a new high of 29%, ranking Longbridge the No. 2 issuer.

"On the commercial side, affiliated originator Sheridan Capital continues to grow its footprint, and EFC is institutionalizing the business by building out capital markets and operational infrastructure," George and Labetti add.

"We continue to see our thesis reinforced by [second-quarter] results," B. Riley Securities analyst Timothy D'Agostino (Buy) wrote after the company's most recent earnings report. D'Agostino cites three pillars: "1) EFC's reverse mortgage originator, Longbridge, as well as EFC's other differentiated origination platforms; 2) a dynamic platform allowing EFC to shift capital allocation based on the market environment; 3) continued increased long-term financing, [which] should improve the liability side of the balance sheet."

Those represent two of the company's six Buy calls. EFC also has two Holds, but no Sells.

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1. Dynex Capital

• Industry: Mortgage REIT
• Market capitalization: $3.3 billion
• Dividend yield: 15.3%
• Consensus analyst rating: 1.83 (Buy)

Dynex Capital (DX) is the longest-tenured mREIT, founded in 1987. And it's explicitly an "agency" mREIT, which means it deals in mortgages and MBSes from government agencies such as Freddie Mac and Fannie Mae. In fact, its portfolio is 97% agency residential MBSes (RMBSes), and most of the remainder is agency commercial MBSes (CMBSes).

Keefe, Bruyette and Woods, whose analysts rate Dynex at Outperform, was broadly bullish on agency MBS sectors heading into 2026. Agency MBS spreads tightened in the back half of 2025, but KBW believed spreads would benefit from a steeper yield curve as the Federal Reserve cut rates. The year hasn't played out that way so far, but KBW still remains upbeat about DX.

Related: 11 Best Alternative Investments [Options to Consider]

"We expect valuation to trend up as the market cap increases, which should continue as the company issues equity accretively and returns remain strong," KBW recently wrote. "Management noted equity issuance this quarter was at a premium to book value as the shares traded above book value for a large part of the quarter. We believe more scale makes sense both in terms of improving operating efficiency and also in terms of valuation since the market appears to be willing to pay a meaningful premium for larger market cap names. We expect DX to continue to raise capital opportunistically through its ATM as long as it remains accretive to book value."

KBW is just one of a handful of analyst outfits that cover Dynex, which is typical for the mREIT industry. Still, among these few pros, the bulls are the majority—DX has four Buys versus two Holds and no Sells.

Dynex pays a monthly dividend, and a generous one at that—it yields more than 15% as I write this. However, mortgage REITs tend to have shakier dividend histories than traditional stocks and even equity REITs, and DX is no exception. Its dividend was hacked away by 85% between 2012 and 2020, to 13¢ per share monthly. But things are looking up recently: The company finally raised its dividend in mid-2024, to 15¢, then again in February 2025, to 17¢.

Still, that payout history is an important reminder that double-digit yields are hardly risk-free.

Related: 7 Best Real Estate Crowdfunding Sites + Platforms

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Do All Companies Pay Dividends?

Not all companies pay dividends. Some companies choose not to, while other companies cannot afford to.

As you can tell by this list, the best dividend stocks are normally slow-and-steady companies that have consistent operations. While it might be possible for a small software company or biotech firm to double its share price overnight, these companies rarely pay dividends because they don’t have much in the way of profits—and what they do have, they want to spend on other things, like research and development to continue growing.

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How Often Do Companies Pay Dividends?

The cycle of paying dividends is always different depending on the company. While it’s generally true that most U.S. corporations opt to pay their shareholders a dividend once per quarter, the dates aren’t fixed.

Specifically, one company might pay you on a January-April-July-October payment cycle while another opts for February-May-August-November.

Complicating things further, some companies pay dividends twice a year, some pay once a year, and some even pay “special” unscheduled dividends.

Related: Best Fidelity Retirement Funds for a 401(k) Plan

What Should Income Investors Look for in a Dividend Stock?

There are a host of things to consider when looking for the best dividend stocks.

First, and foremost, you should make sure you understand the underlying business and its strategy; just because a company pays a dividend doesn’t mean it can’t crash and burn.

If you generally like what you see, then you should consider the quality of the dividends including the history of payouts and the payout ratio as a portion of total earnings.

Then, you should consider the quantity of that dividend and the potential for future growth in payouts.

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Related: The Best Dividend ETFs You Can Buy Right Now

We love exchange-traded funds (ETFs) because they can provide one-click access to hundreds, even thousands of stocks, while charging often minuscule fees.

One way to put that low-cost diversification to work? Collecting dividends. But trying to choose from literally hundreds of income-producing funds could take up a lot more time than you have. So let us help you narrow the field—check out our list of 10 top dividend ETFs.

Related: 10 Great Fidelity ETFs for Investors Who Want Something Different

Investors often look to exchange-traded funds (ETFs) for cheap, passive exposure to basic broader market indexes like the S&P 500.

But Fidelity's ETF suite really shines because in addition to some of those plain-vanilla offerings, Fidelity also provides more tactical ways of tapping into specific corners of Wall Street. See what we mean by checking out our list of the best Fidelity ETFs.

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Housing prices have risen in perpetuity for decades, and the past few years have been particularly painful for prospective buyers—so much so that the sky-high costs of owning a home make for regular headlines in everyday media.

So it probably goes without saying (though we'll say it anyways) that Americans are in desperate need of ideas that would lower their burden and make housing more accessible to more than just the ultra-rich.

And very recently, a new contender entered the arena:

The 50-year mortgage.

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First-Time Homebuyer Data Gets Uglier

As I just said, there's nothing new about Americans' struggles to find affordable housing, but a pair of recent data points from the National Association of Realtors (NAR) really drive the message home. In early November, the NAR reported that:

• The share of first-time homebuyers fell to an all-time low of just 21% of all homebuyers.
• The typical age of first-time homebuyers climbed to an all-time high of 40 years.

Put differently? An increasing majority of homebuyers are those who have already purchased at least one home—and thus have an asset they can sell to put toward the purchase of a new home.

Young and the Invested Tip: Selling a home is like selling many other assets in that you'll likely owe capital gains taxes. Here's what you need to know about this kind of tax.

Meanwhile, the minority share of first-time homebuyers is becoming increasingly older, implying that Americans must save for longer than ever before to be able to afford taking the dive into homeownership—and it's doing so pretty rapidly. The median age of first-time buyers, now at 40 years old, was 38 last year, and 33 just five years ago.

The troubling but unsurprising acceleration aligns pretty much perfectly with an explosion in the two most core components of purchasing a home: home prices ...

... and mortgage rates:

Theoretical fixes typically have to do with America's housing deficit, which hit an all-time high 4.7 million homes in July despite a pick-up in construction.

Recently, President Donald Trump floated a fix that would approach the crisis from a different angle: financing.

Specifically, he proposed a new 50-year mortgage plan.

Of course, that's about as specific as the proposal got.

Source: Truth Social

Adding a whiff of legitimacy was U.S. Director of Federal Housing Bill Pulte, who said on X (formerly Twitter) that "we are indeed working on The 50 year Mortgage - a complete game changer."

Whether this idea will have any legs remains to be seen, but the initial reaction among economists, analysts, and other experts is … well, skeptical.

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Can a 50-Year Mortgage Really Help?

On its face, the logic seems pretty straightforward: Spreading out the same home price over a larger number of monthly payments would reduce the size of those monthly payments.

"From a simple affordability perspective, we estimate that a 50-year mortgage product (with a 50bps higher rate) could lower the monthly payment on a median priced home (~$420K, assuming a 12% down payment) by roughly -$119 or increase an average consumer's buying power by almost $23k, relative to a 30-year mortgage," says a team of UBS analysts led by John Lovallo.

The problem, of course, is you're not just extending the loan principal across 20 more years—you're also stretching out the interest payments. 

And as Lovallo and others point out, that small improvement in month-to-month affordability would come at a significant cost.

"Extending the term reduces the monthly cost, but it dramatically increases the amount of interest a borrower pays over time," Jose Pascual, Head of Mortgage & Commercial Banking, PSECU, a Pennsylvania-based credit union. "On a $500,000 loan at current rates, the interest paid on a 50-year mortgage would more than double the overall cost of the loan."

Young and the Invested Tip: Many Baby Boomers are reluctant to sell off their current home for a smaller one. Here are a few of the reasons why.

And again, that's assuming current rates.

"The interest rate would most likely be higher than a 30-year mortgage," says Carolyn Morganbesser, Associate Vice President of Mortgage Originations at Affinity Federal Credit Union, who added that a 50-year mortgage "is not a necessary lending option, but it would depend on the borrower."

Why would interest rates be higher? Well, for one, longer maturities mean lenders are taking on more risk, which they offset by charging a greater rate.

But Lovallo adds that the Dodd-Frank Act would have to be amended to classify 50-year mortgages as qualifying loans. Failure to do so could result in the mortgages carrying even higher interest rates than what the longer maturity alone would demand.

There's also the downside of slower amortization (paying down the loan). Pascual notes that by the time a homeowner could pay off a 30-year mortgage, the borrower of a 50-year loan would have paid down just 26% of their original balance—limited progress that doesn't really benefit the borrower.

And all of that assumes the homebuyer is even still alive to make all of those payments.

"Other potential complicating factors include the fact that the average first-time buyer is 40 years old (overall average buyer is 59) and therefore could be deceased before a 50-year mortgage matures," Lovallo says.

In many ways, the math simply isn't mathing—at least not in a way that provides a net benefit to would-be homebuyers.

"There's nothing wrong with creative repayment structures when they truly improve affordability, but consumers should be careful not to substitute lower payments for long-term financial stability," says Mike Petrakis, CEO of lender PowerPay. "A 50-year mortgage might work for a narrow group of borrowers, but it shouldn't become the default solution for the pressure buyers are feeling in an already competitive housing market."

Never say never, of course—Year 1 of Trump Part 2 has been nothing but proof that we should expect the financially unexpected.

But when even the Treasury is throwing cold water on an idea, we probably shouldn't hold our breath.

"That was one proposal," Joe Lavorgna, a counselor to Treasury Secretary Scott Bessent, said during an appearance on NewsNation's The Hill. "The feedback has been such that probably—and it did not come from Treasury—but probably not an optimal approach."

Disclaimer: This article does not constitute individualized investment advice. These securities appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

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However, the average tax refund for the year fell well short of the administration's lofty projection—but they were indeed higher than last year. Tax law changes made by the "One Big Beautiful Bill" (OBBB) are primarily responsible for the uptick. But that doesn't necessarily mean you received a big refund (or smaller tax bill).

If you're wondering how your refund compares to others, read on to see how high the average tax refund actually climbed in 2026. We'll also explore why refunds rose, who was expected to get a bigger refund, how long it typically takes to get paid, and what steps you should take if you do get a substantial refund.

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What's the Average Tax Refund So Far in 2026?

As of April 17, 2026 (two days after tax returns were due), the IRS processed over 138 million tax returns and issued over 90 million refunds.

For all the refunds issued so far, the average amount is $3,275, which is $333 (or 11.3%) higher than the average refund at the same point during last year's tax season (which was $2,942).

This is a far cry from the expected extra $1,000 that I mentioned earlier. So, while refunds are higher, they're not as large as originally expected.

Why Are Tax Refunds Expected to be Higher This Year?

Generally speaking, you get a tax refund from the IRS when the federal income taxes you paid during the year through paycheck withholding and/or estimated taxes are greater than the taxes you owe for the year (as reported on your tax return).

So, for example, if too much tax is withheld from your income, or your tax bill is cut, you could end up with a larger tax refund … and the OBBB, which was enacted in July 2025, made both of these things possible for millions of Americans.

First, the OBBB created four new tax deductions and expanded several other tax breaks for the 2025 tax year. These changes will reduce the amount of tax owed for qualifying taxpayers. Among other things, the legislation enhanced or added the:

• Child tax credit (increased from $2,000 to $2,200 per eligible child)
• Standard deduction (increased it by 5%)
• State and local taxes (SALT) deduction (increased the maximum deduction from $10,000 to $40,000)
• Senior deduction (added new deduction)
• Tip deduction (added new deduction)
• Overtime deduction (added new deduction)
• Car loan interest deduction (added new deduction)

Second, after these changes were made, the IRS didn't adjust the 2025 withholding tables used by employers to calculate the amount of federal income tax to withhold from their employees' paychecks. As a result, for people who can benefit from the new or improved tax breaks listed above, their withholding wasn't reduced by a corresponding amount. This caused over-withholding for many people in 2025.

Likewise, the estimated tax payment rules weren't adjusted after the OBBB's passage. So, self-employed people and other taxpayers who made estimated payments for the 2025 tax year may have also paid more tax in advance than necessary.

So, again, if you took advantage of any of the OBBB changes, and your 2025 withholding or estimated tax payments stayed the same, this likely either:

• Triggered a tax refund
• Boosted the tax refund you would have otherwise received
• Cut the tax bill you would have otherwise had to pay when you filed your return

Which outcome applies depends on all the factors that make up your overall tax situation.

Related: Tax Prep Checklist [Get Ready to File Your 2025 Tax Return]

Who Could Get a Bigger Refund This Year?

Millions of people could potentially receive a larger tax refund this year because of the new or enhanced tax breaks enacted by the OBBB. For instance, the following taxpayers might get a larger refund under the OBBB:

Families with children: The increased child tax credit will put more money in your pocket. Since the credit is worth $2,200 per eligible child, families with more than one child will qualify for a larger overall credit. Plus, some of the credit may be "refundable," which means a portion of the credit will be paid back to you even if you owe no or little tax.

Seniors who are at least 65 years old: The new senior deduction is worth up to $6,000 per eligible person. If you're married and both you and your spouse were at least 65 years old at the end of 2025, your combined deduction could be as much as $12,000. However, if your income is too high, your deduction is reduced (potentially to $0).

Residents in high-tax states: If you pay a lot of state and/or local income, sales, or property taxes, you might be able to deduct an additional $30,000 of those taxes on your federal income tax return. That's because the SALT deduction cap was raised from $10,000 to $40,000 (although the cap can drop back down to $10,000 if your income is above a certain threshold). Note that you have to itemize in order to claim the SALT deduction (so you can't claim the standard deduction), and you have to choose between deduction state and local income taxes or sales taxes (you can't deduct both).

Workers who receive tips or earn overtime pay: New tax deductions for tip income and overtime pay will help a lot of workers. However, not all tips or overtime pay are deductible, and various restrictions apply. For instance, you can only deduct the first $25,000 of qualified tips received during the year, or the first $12,500 of overtime pay earned during the year (up to $25,000 for joint filers). These deductions are also gradually phased-out if your income is above a certain amount.

Non-itemizers: If you take the standard deduction instead of claiming itemized deductions on Schedule A (you can't claim both), you'll benefit from the OBBB's increased "regular" standard deduction amount for 2025. Since close to 90% of all taxpayers claim the standard deduction, the 5% increase will help a lot of people. Plus, if you're 65 or older, or blind, you can take an "additional" standard deduction of either $1,600 or $2,000, depending on your filing status. If you're both 65+ and blind, you can double the additional amount.

New-car owners: If you took out a loan in 2025 to buy a new car that was assembled in the U.S., you may be able to deduct up to $10,000 of interest you paid last year on the loan. However, this deduction is also gradually reduced (or completely eliminated) if your income is too high. You can find out if your car was assembled in the U.S. by checking the car's "window sticker" or entering its VIN in the National Highway Traffic Safety Administration's online VIN Decoder.

Related: How Is Retirement Income Taxed?

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How Quickly Will Your Tax Refund Arrive?

The IRS seems very proud of the fact that they typically process your return and issue a refund within 21 days if you file electronically. However, if you file a paper return, it can take six weeks or longer from the date they receive your return to send a refund payment. So, there's lesson No. 1 if you want your refund sooner: E-file your tax return!

However, there are a number of reasons why your refund could be delayed (even if you e-file). For instance, it could be held up for:

• Mistakes on your return (e.g., math errors or missing income)
• Incomplete returns (e.g., missing forms or forgetting to sign your return)
• Identity theft or fraud (e.g., someone filed a return using your name and Social Security number)
• Injured spouse relief (if you file Form 8379 to request relief, the IRS has to manually process your case)

Also note that the IRS is phasing out the use of paper refund checks. They will only mail you a paper check in rare cases. So, that means most people will get their refund payment via direct deposit into your bank account. But the good news is that direct deposit is a much faster way to get your money!

Related: 11 Ways to Avoid Taxes on Social Security Benefits

Want to Avoid a Large Refund Next Year?

You might be thinking: "Why would I want to avoid a big refund next year!?" Fair question.

I understand the excitement when the IRS drops a big refund payment into your bank account. But a tax refund basically means you gave Uncle Sam an interest-free loan. For workers, the extra taxes withheld from each paycheck, which generated your refund, could have been earning interest in your bank account during the year, instead of in the government's account.

It's generally best if the amount of federal income tax withheld from your paychecks during the year comes close to the amount of tax you'll owe for the year. That way, you'll either get a small refund or only pay a small amount when you file your return.

To reach that balance, workers can submit a new W-4 form with their employer. Your employer will then use the new form to reset your income tax withholding. Plus, the IRS recently updated the W-4 form to account for the OBBB changes. So, if you receive a big refund this year because of the new or improved tax breaks from the OBBB, completing a new W-4 form should help correct your withholding for 2026.

For more information, see When and How to Adjust Your Tax Withholding.

Copyright © 2026 by Rocky Mengle. All rights reserved. Used with permission.

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But across much of the U.S., that floor is even higher.

More than half of all states have a state-level minimum wage that exceeds the federal minimum, in some cases by quite a bit. And in various pockets around the country, cities have established their own minimum wages that even exceed the higher bar their state has set.

Today, I'll show you the cities with the highest minimum wages in the nation. Indeed, even at the bottom of this list, these cities' minimums are more than double the current federal standard.

What Is the Federal Minimum Wage?

The federal minimum wage for covered nonexempt workers is $7.25 per hour. But with the federal minimum wage mired at that same rate since 2009, some states and cities have enacted their own minimum wage requirements.

In the event there are different local, state, and federal minimum wages that all apply to the same employee, the highest rate is the one that must be paid.

Cities With the Highest Minimum Wages

Using data from the Economic Policy Institute, I've compiled a list of the U.S. cities with the highest minimum wages.

The cities with the highest minimum wages don't just beat out the federal minimum wage incrementally—every city on this list requires employers to pay more than double the federal minimum.

Understandably, many of the cities boasting the nation's highest minimum wage requirements also happen to have high costs of living. Regardless, even the lowest-paid workers in each of these cities make more than double the federal minimum wage.

#12 (tie): Cupertino + Los Altos + Santa Clara + Palo Alto, California

Cupertino, located in California's Silicon Valley, is known for being the home of Apple's headquarters. Nearby Los Altos, on the western edge of Silicon Valley, houses many of the area's workers; though it has more than 30,000 residents, people still describe the city as having a small village atmosphere. Santa Clara, in the center of Silicon Valley, is home to the headquarters of some of the world's largest chipmakers, including Nvidia, Intel, and Advanced Micro Devices. (And a fun fact: Santa Clara University is the oldest university in the state.) Palo Alto is known as the "Birthplace of Silicon Valley." It's home to numerous technology companies, including HP, VMware, and Google's Nest Labs—but, despite the name, not Palo Alto Networks, which is HQ'd in Santa Clara.

Cupertino, Los Altos, Santa Clara, and Palo Alto are all less than a half an hour's drive from one another, so it isn't surprising that they will all have the same minimum wage in 2025: $18.20 per hour. That's a big step above the upcoming 2025 California state minimum wage of $16.50 per hour.

Cupertino, Los Altos, and Palo Alto enacted their own minimum wages in 2016, and Santa Clara established its minimum wage in 2017. All three will increase their minimum wages to the upcoming rate at the beginning of 2025.

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#11: El Cerrito, California

El Cerrito, which translates to "the little hill" in Spanish, has a total area of just 3.7 square miles. From this hilly area, residents and visitors can see parts of San Francisco, including the Golden Gate Bridge. Its southern reaches are less than 500 feet from the outskirts of Berkeley and just a few miles from the University of California, Berkeley campus.

This town enacted its own minimum wage in 2015. Thanks to the most recent bump, made at the beginning of 2025, minimum wage workers in El Cerrito now make $18.34 per hour.

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#9 (tie): Berkeley + San Francisco, California

Berkeley is perhaps best known for the acclaimed University of California, Berkeley, as well as the university-operated Lawrence Berkeley National Laboratory. The city also has the Graduate Theological Union, which is one of the largest religious study institutions around the globe.

Most people are familiar with at least a couple of San Francisco's most noteworthy claims: the Golden Gate Bridge, Alcatraz, the "Painted Ladies" Victorian houses, great sourdough bread. And if you're a fellow Millennial and would like to reminisce with me, it's also where the characters of the show Full House lived.

As Berkeley and San Francisco are both high-cost-of-living cities, it's no surprise that they also have higher minimum wages than most of the country. Both cities made local minimum wage increases on July 1, 2024, which brought their minimum rates up to $18.67 per hour.

Related: 7 Best High-Dividend ETFs for Income-Minded Investors

#8: Denver, Colorado

You're probably wondering by now whether every city on this list is located in California. Not so! Colorado's capital city has a high minimum wage that matches its altitude! Denver is known for being nestled in the foothills of the Rocky Mountains, hence its nickname, "The Mile-High City." It's best known for Coors Field, the Red Rocks Amphitheatre, and the Denver Art Museum, among other attractions.

Denver enacted its own minimum wage in 2019, and its most recent increase—effective as of the start of 2025—ensures that even its lowest-paid hourly workers enjoy a rate of $18.81 per hour. That's not just a higher minimum wage than the federal standard—it's considerably better than even Colorado, which provides one of the 10 highest state minimum wages.

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#7: Sunnyvale, California

Sunnyvale is another city in the Bay Area chock full of tech names, including LinkedIn, Armorblox, Fortinet, and med-tech name Intuitive Surgical, which makes robotic surgical systems. (It's also where Atari was founded.) And many of the city's residents who don't work for Sunnyvale companies tend to commute to work for Apple, Google, Lockheed Martin Space, Amazon, and more.

Sunnyvale, like many other California cities, makes minimum-wage adjustments every year. Its latest update, effective as of Jan. 1, 2025, was a bump from $18.55 per hour to $19.00 per hour.

Related: 9 Best Fidelity ETFs for 2025 [Invest Tactically]

#6: Emeryville, California

Emeryville is a town on the San Francisco Bay. It's home to Pixar Animation Studios—fun fact: nearly all Pixar films feature Emeryville in some small way—Peet's Coffee & Tea, Clif Bar, and LeapFrog.

The town enacted its own minimum wage in 2015. Emeryville's most recent increase became effective on July 1, 2024, bringing the minimum wage to $19.36 per hour.

Related: 12 Best Apps That Give You Money for Signing Up [Free Money]

#5: Mountain View, California

Mountain View is another Silicon Valley city—headquarters to not just a slew of technology giants including Google and Intuit, but also the home of Microsoft's Silicon Valley HQ. Among points of interest in the city are Shoreline Park, the Computer History Museum, and the Shoreline Amphitheater.

The city established its minimum wage law in 2015. Its most recent increase, effective Jan. 1, 2025, will raise the current minimum wage to $19.20 per hour, up from $18.75 per hour in 2024.

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#4: SeaTac, Washington

While this list is just loaded with California names, the top cities for high minimum wages all belong to Washington—which offers up the highest minimum wage for any state, at $16.28 per hour.

I'll start with SeaTac, which is a portmanteau of Seattle and Tacoma. This area includes the communities of Angle Lake, Bow Lake, McMicken Heights, and Riverton Heights. SeaTac is home to the Seattle-Tacoma International Airport and is the headquarters for Alaska Airlines and Horizon Air. Roughly 80 of the city's businesses are Fortune 1000 companies.

SeaTac's minimum wage, which was bumped from $19.71 per hour to $20.17 per hour on Jan. 1, 2025, increases every year based on inflation. But there's a big caveat: It doesn't apply to all workers making minimum wage—it only applies to hospitality and transportation workers.

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#3: Seattle, Washington

Many of the cities with the highest minimum wages are home to giant tech firms, and Seattle is no exception, hosting Amazon's headquarters. But it's also home to Starbucks, it's where Boeing got its start, and it's just a hop, skip, and a jump away from other massive HQs, including Microsoft's and Costco's home bases. On top of that, Seattle is known for the Space Needle, Pike Place Market, Frasier, and being the birthplace of grunge.

This seaport city enacted its own minimum wage back in 2014, and it will soon increase that wage on Jan. 1, 2025, to $20.76 per hour, up from $19.97 per hour in 2024. But again, there's an asterisk: Smaller employers (with 500 or fewer employees) only have to pay $17.25 per hour if covered employees receive tips, or if employer contributions toward their medical benefits are equivalent to at least $2.72 per hour.

Related: How Are Social Security Benefits Taxed?

#2: West Hollywood, California

Trendy, progressive West Hollywood is a city within Los Angeles County. It's home to the Sunset Strip, which is well-known for its restaurants, shops, and vibrant nightlife. And visitors going celebrity-watching can sometimes find the stars at some of West Hollywood's more upscale locales.

While hourly paid workers almost certainly don't make as much as those celebrities, they do earn some of the higher minimum wages around. The most recent minimum wage increase in West Hollywood went into effect on July 1, 2024, raising the bar to $20.86 per hour.

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#1: Tukwila, Washington

Tukwila, located south of Seattle, boasts a diversity of cultures—the city claims more than 80 languages are spoken in the area, and unsurprisingly, residents also get to enjoy a wide range of cuisines. Top employers include Sound Health, Boeing Employees Credit Union, Boeing Company, and Prime Now LLC.

Tukwila also is home to the highest city-level minimum wage in the country. The city enacted its own minimum wage in 2022. The most recent increase, which became effective at the beginning of 2024, puts the current minimum rate at $20.29 per hour, but this rate will rise to $21.20 per hour on July 1, 2025.

But like with Washington's other city-level minimum wages, Tukwila's minimum isn't applicable across the board—it only applies for large employers (those with 500 or more employees). Employers with between 15 and 499 employees have a separate minimum wage of $18.29 per hour. And employers with fewer than 15 employees that also earn less than $2 million in annual revenue default to the state minimum wage.

Related: The 10 Best Vanguard ETFs for 2025 [Build a Low-Cost Portfolio]

Related: The 10 Best-Rated Dividend Aristocrats Right Now

Dividend growth puts more cash in our pockets and signals that the company we're invested in is confident in its ability to keep churning out profits. And there's no more heralded group of dividend growers than the Dividend Aristocrats, which are companies that have paid higher cash distributions each year for at least a quarter-century.

But even Aristocrats aren't created equally. Check out which dividend growers Wall Street loves the best right now in our list of the top-rated Dividend Aristocrats.

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“Reading too far into today’s CPI in most respects amounts to arguing over the dinner menu on the Titanic, since the economy has struck an energy cost iceberg," says Brad Conger, Chief Investment Officer at investment firm Hirtle Callaghan.

The U.S. Bureau of Labor Statistics said Wednesday that February's CPI, which measures the change in prices on a variety of consumer goods and services, rose by a seasonally adjusted 0.3% month-over-month—a hair faster than in January (0.2%) but on par with consensus expectations. That put consumer prices 2.4% higher year-over-year, which also matched economists' expectations and was level with January's CPI growth.

"Core" CPI—a measure of inflation that excludes food and energy costs (factors that are more volatile than the other prices tracked by the Labor Department)—remained steady, too. Core CPI for February was just 0.2% higher month-over-month, which was the same as January and December and right where economists expected. On a year-over-year basis, the core CPI rate of 2.4% was a touch softer than projections for 2.5% growth.

Here's a quick look at February's key CPI figures—the last before the Iran war (and its effects on global energy markets) is expected to bleed into the data:

• MoM CPI: +0.3% (estimate: +0.3%)
• YoY CPI: +2.4% (estimate: +2.4%)
• MoM Core CPI: +0.2% (estimate: +0.2%)
• YoY Core CPI: +2.4% (estimate: +2.5%)

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"This is a welcomed number on the surface, but one that may already be outdated," says Alexandra Wilson-Elizondo, Global Co-CIO of Multi-Asset Solutions at Goldman Sachs Asset Management. "February's data was collected before the conflict in Iran sent crude oil surging roughly 30%, with natural gas, aluminum, fertilizer, freight rates, and shipping insurance moving higher with it.

"The Strait of Hormuz remains the wildcard, and if disruption is sustained, the inflation improvement embedded in today's print could reverse quickly. That said, no lasting damage to the Strait has been reported thus far. Should the Strait reopen in short order, shut ins can come back online in as little as 48 hours, with full operations restored within zero to four weeks, and the pass-through to inflation would be limited."

Fuel oil saw the sharpest increase in costs, spiking by 11.1%, which drove energy commodities as a whole 1.1% higher. Utility gas service costs also grew, by 3.1%. Other noteworthy increases in price included apparel (+1.3% month-over-month), gasoline (+0.8%), and medical care services (+0.6%).

The only two areas in which prices actually declined were electricity (-0.7% MoM) and used car and truck prices (-0.4%). But some categories did start to show signs of relief last month.

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"Housing costs, captured by the 'shelter' component of CPI, continued to moderate (+0.2% MoM), while broad services prices also showed meaningful deceleration," says Gargi Chaudhuri, Chief Investment and Portfolio Strategist, Americas at BlackRock. "This has been one of the most encouraging trends in recent months, as shelter has been a component that kept inflation elevated the last few years. Continued easing in this category should help support further gradual progress in overall inflation.

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"Auto-related inflation eased, driven by declines in used car prices and car insurance costs. Airfare prices were broadly in line with the prior month. However, rising jet fuel costs, linked to geopolitical tensions in the Middle East, could put upward pressure on airfares in the coming months."

Fed Expected to Keep Interest Rates Level

While inflation remained above the Federal Reserve's 2% target, Wall Street continues to expect that uncertainty about economic data because of the Iran war will stay the hand of America's central bank, and that the target range for its benchmark interest rate will remain steady at the central bank's next meeting later this month.

Specifically, the CME FedWatch Tool, which uses trading in federal-funds futures to determine Wall Street's expectations for future Federal Reserve actions, now shows a 99% chance that the target range for the federal funds rate will stay at its current 3.50% to 3.75% at the conclusion of the next Federal Open Market Committee (FOMC) meeting, scheduled for March 17-18. The figure also barely flinched last week after a surprise loss in February's jobs report.

"This report alone is unlikely to change the Fed’s calculus for next week’s meeting," says Jason Pride, Chief of Investment Strategy and Research at Glenmede. "The overwhelming expectation remains that policymakers stay on hold.

"Looking further ahead, one to two rate cuts this year remains a reasonable base case, though the path will depend on the balance between the health of a fragile labor market and potential inflation pressures from the Middle East conflict. But if the geopolitical risk premium currently embedded in energy markets begins to fade, it could give the Fed more room to lean toward supporting a fragile labor market."

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What the Experts Think About February's CPI Report

Here, we outline more thoughts from the experts on what last month's CPI numbers mean for consumers, markets, the Federal Reserve's future actions, and more:

John Kerschner, Global Head of Securitized Products and Portfolio Manager, Janus Henderson Investors

"The highlight of today's numbers for us comes from the Owner's Equivalent Rent (OER) measure coming in at 3.17% on a YoY basis—the lowest level since October 2021—proving that affordability of shelter continues to progress. OER is now at the steady state level that we saw from 2016-2020, once housing had recovered from the Global Financial Crisis (GFC) but before the post-Covid spike in HPA (home price inflation).

Now for the not so good news. PCE inflation on Friday will likely look significantly worse than this morning's numbers—likely north of 3%—and even more worrisome, headed in the wrong direction. This is a result of PCE inflation focusing on what consumers actually buy (Personal Consumption Expenditures), and thus, PCE has a higher exposure to healthcare, but less on housing. Over the long term, PCE inflation averages approximately 50 basis points less than CPI, but currently we see this relationship flipped, where PCE inflation is approximately 50 basis points higher."

Josh Jamner, Senior Investment Strategy Analyst, ClearBridge Investments

"CPI printed in-line with consensus expectations for February—a ho-hum release that reflects the period before the escalation of military action in the Middle East that will lift inflation readings next month due to higher energy prices.

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An encouraging sign was the moderation in both core and 'supercore' CPI, showing that price pressures were not accelerating into the current oil price shock, which should give policymakers some degree of comfort. Core CPI stayed at 2.5% on a YoY basis—the lowest reading in nearly four years.

With today’s release already largely 'stale' due to recent events in the middle east, we expect financial markets to have a limited reaction to this news."

David Russell, Global Head of Market Strategy, TradeStation

"Steady disinflation on shelter is a good sign, but tariffs seemed to drive up the apparel category. These inflation numbers provide some comfort, but this month’s spike in energy prices make them a relic of the past.

Investors and the Fed are in uncharted territory right now, taking their cues from crude oil and tanker traffic in the Strait of Hormuz."

Sonu Varghese, Chief Macro Strategist, Carson Group

“CPI inflation for February was along expectations but this is the calm before the storm that will show up due to surging gasoline prices in March. Still, this report does show that the Fed has an inflation problem even if you set aside the energy shock. Tariff impacts are still hitting core goods inflation, while services inflation outside housing remains hot."

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