3 ETFs That Thrive When the Fed Does Absolutely Nothing

<h3>Quick Read</h3>
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<li> <p class="yf-1fy9kyt">These ETFs can be big beneficiaries if you expect the Fed to stay hands-off with interest rates this year.</p></li>
<li> <p class="yf-1fy9kyt">The Fed may be rethinking interest rate cuts as oil prices are soaring.</p></li>
<li> <p class="yf-1fy9kyt">A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality.</p><a href="https://247wallst.com/lp/the-simple-habit-that-can-double-americans-retirement-savings-and-why-you-should-start-today/?i=c13212fb-c9fa-45d7-97b4-e261e084465f&amp;p=ebadc3d1-a33c-4a9b-912c-8b2543ac0c0b&amp;pos=keypoints&amp;tpid=1559696&amp;utm_source=yahoo&amp;utm_medium=referral&amp;utm_campaign=feed&amp;utm_content=feed||1559696">Read more here</a>.</li>
</ul>
<p>Everyone expects the Federal Reserve to take action during crises, but the past few years have shown that the opposite is the case, as the Fed has preferred a more "hands-off" approach after record interest hikes. Thus, buying ETFs like Invesco KBW Bank ETF (<a href="https://finance.yahoo.com/quote/KBWB/">NASDAQ:KBWB</a>), State Street SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (<a href="https://finance.yahoo.com/quote/XOP/">NYSEARCA:XOP</a>), Sprott Uranium Miners ETF (<a href="https://finance.yahoo.com/quote/URNM/">NYSEARCA:URNM</a>) may be the best idea if the Fed keeps doing nothing.</p>
<p>There's strong evidence to suggest that could be the case. While I expect a rate cut or two rate cuts this year, it is becoming increasingly unlikely that the Fed will cut aggressively. Crude oil prices are soaring and could leave a lasting impact on inflation. In turn, the Fed will get even more unwilling to cut rates.</p>
<p>While the upcoming Fed chair has said he would like to cut rates, he won't be able to if inflation is climbing. The Fed is already deeply divided.</p>
<p>Read: <a href="https://247wallst.com/lp/the-simple-habit-that-can-double-americans-retirement-savings-and-why-you-should-start-today/?i=c13212fb-c9fa-45d7-97b4-e261e084465f&amp;p=d474a5a7-790a-4f9f-bfcb-02fc45c14ad3&amp;pos=mid_content&amp;tpid=1559696">Data Shows One Habit Doubles American’s Savings And Boosts Retirement</a></p>
<p>Most Americans drastically underestimate how much they need to retire and overestimate how prepared they are. But data shows that <a href="https://247wallst.com/lp/the-simple-habit-that-can-double-americans-retirement-savings-and-why-you-should-start-today/?i=c13212fb-c9fa-45d7-97b4-e261e084465f&amp;p=d474a5a7-790a-4f9f-bfcb-02fc45c14ad3&amp;pos=mid_content&amp;tpid=1559696">people with one habit</a> have more than double the savings of those who don’t.</p>
<p>These ETFs can take advantage if that division morphs into paralysis, if it hasn't already.</p>
<h2>Invesco KBW Bank ETF (KBWB)</h2>
<p>Banks are one of the clearest equity beneficiaries of a "no cut" scenario. Their net interest margins stay healthy when short-term rates remain elevated, especially with the yield curve having steepened somewhat.</p>
<p>KBWB has fully recovered from the 2023 "mini banking crisis," though it is down over 15% from its recent peak. It's a good buy-the-dip opportunity if the Fed keeps rates as-is. KBWB remains safer compared to most other banking ETFs as it holds the largest banks. Those who sold back in 2023 came to regret it, as money that left regional banks flowed straight into these stronger banks.</p>
<p>The ETF yields 2.25% with rising dividend growth. Its dividend growth rate in the past 3 years was just 2.94% annually, but has increased to 6.7% in the past 12 months. The expense ratio is also low at 0.35%, or $35 per $10,000.</p>
<p>Regardless of how the economy does, I don't expect a bank run anytime soon. Even if the Fed does nothing with interest rates, it is likely to step in to help banks if things do go awry, especially under the current administration.</p>