30-Year Treasury Yield Surpasses Dividend Stocks by 2.2%

On August 18, the 30-year Treasury yield increased to 5.33%, marking its highest level in 19 years as inflation and government spending concerns rise. In comparison, the Schwab U.S. Dividend Equity ETF (SCHD) currently yields 3.1%, creating a 2.2 percentage point gap favoring the Treasury bond. The last time similar yields were observed in 2007 led to significant dividend cuts; for instance, 804 cuts were recorded in 2009. This trend indicates a potential shift for income investors, assessing whether to favor bonds over dividend stocks.