After a solid 2023 and a great start to this year, volatility returned to Wall Street a couple of weeks ago as concerns grew over the Federal Reserve’s timing for the first rate cut. Investors were expecting that the Federal Reserve would soon announce the first rate cut, but hopes dimmed after data showed that inflation increased in January.

The consumer price index (CPI) rose 0.3% month over month in January and 3.1% from a year ago, the Commerce Department reported. Also, core CPI, which excludes the volatile energy and food prices, rose 0.4% sequentially and 3.9% year over year in January.

The hotter-than-expected inflation reading has dented investors’ confidence. Also, the minutes of the Federal Reserve’s January FOMC meeting suggest that the central bank is in no rush to cut interest rates. It will go for the first rate cut only after the officials have “greater confidence” that inflation has eased.

The Federal Reserve had already ruled out a chance of a rate cut in March as inflation remains above its 2% target rate. Markets were expecting the first rate cut in May but now many believe that the first rate cut won’t happen before the June FOMC meeting.

Markets are now pricing in just a 2.5% chance of the Federal Reserve going for a rate cut in March, according to the CME FedWatch tool. The probability was more than 90% in the first week of January.

Higher interest rates can keep markets volatile for a longer time.

Stocks in Focus

Given the current situation, investors looking to safeguard their portfolios may find dividend-yielding stocks a wise choice. It is advised to explore stocks that have recently increased their dividend payments.

Four such stocks are CSG Systems International, Inc. CSGS, Ramaco Resources, Inc. METC, L3Harris Technologies, Inc. LHX and Universal Display Corporation OLED.

CSG Systems International, Inc.is a leading provider of outsourced billing, customer care, and print and mail solutions and services supporting the North American cable and direct broadcast satellite markets. CSGS' solutions support some of the world's largest and most innovative providers of bundled multi-channel video, Internet, voice and IP-based services.  CSG Systems International has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On Feb 25, CSG Systems International announced that its shareholders would receive a dividend of $0.30 a share on Mar 28, 2024. CSGS has a dividend yield of 2.08%. Over the past five years, CSG Systems International has increased its dividend six times, and its payout ratio at present sits at 38% of earnings.Check CSG Systems International’s dividend history here.