Federal Reserve chairman Jay Powell has finally decided to deal tough with inflation. After years of zero interest rates and constant stimulation, things will change. The market now expects three rate hikes and quantitative easing to expand to $ 30 billion a month in both 2022 and 2023, and that number could rise soon too. Now that the Federal Reserve has cornered itself, it must fight its way out.

One industry that loves rising interest rates is banking, as interest rates and bank profitability are linked. When interest rates are higher, banks make more money by taking advantage of the difference between the interest the banks pay to customers and the interest the bank can get from investments. In addition, due to higher interest rates, banks can charge more in their loan portfolios.

We scoured our 24/7 Wall St. Research database for Buy-rated bank stocks that also pay the highest solid and reliable dividends. When you combine the positives of rising rates and the continued growth of the reopening, the banking sector could be poised for above-average total returns, especially after lagging sharply in 2021. It is important to remember that no single analyst report should be used as the sole basis for making every decision to buy or sell.

City group

This top bank has bounced back from its lows but is set to climb higher in 2022. Citigroup Inc. (NYSE: C) is a leading globally diversified financial services company providing a wide range of financial products and services to consumers, businesses and governments.

Citigroup provides services such as consumer banking and credit, corporate and investment banking, securities brokerage, transactional services and asset management. It operates and operates in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.

This company trades at a still very cheap 7.7 times its estimated 2022 earnings and looks very reasonable in what remains a volatile stock market and a sector that has lagged dramatically.

Investors receive a dividend of 3.39%. DA Davidson has a price target of $ 84 while the consensus target is $ 82.81. Citigroup stock finished trading Thursday at $ 61.07 per share.