Kevin Warsh Just Signaled Higher-for-Longer Rates. Here's What That Means for Big Pharma Dividend Stocks.
Pharmaceutical company share prices may suffer, but probably not by as much as some might fear.
Overview
On Sept. 16, the Federal Reserve hiked interest rates. It happened to follow a decidedly hawkish August speech by the new Fed Chairman, Kevin Warsh. At the September meeting, Warsh said that inflation "is too high and has been for too long." The implication of his comment is that rates would need to rise further to better tamp down inflation and remain elevated for a longer period.
Such Fed actions could pose a threat to big pharma dividend stocks that investors count on to provide their portfolios with regular, stable cash flows, especially the biggest companies in that category, like Pfizer (NYSE: PFE), AbbVie (NYSE: ABBV), and Bristol Myers Squibb (NYSE: BMY). That sounds bad. But on a positive note, history says that rate hikes, even when sustained, won't be enough to break those players.
Details
Here's what you need to know.
Source
Originally published at www.fool.com.