2 Dividend Stocks to Buy Even as New Fed Chair Kevin Warsh Holds Interest Rates Steady

It didn't take long for new Federal Reserve Chair Kevin Warsh to make some waves. The Federal Open Market Committee unanimously approved the decision to hold the federal funds rate steady at the 3.5%-to-3.75% range this month. But that doesn't mean the Fed won't push rates higher later this year. Inflation, after all, remains stubbornly above the Fed's 2% goal.

However, the decision should give investors some breathing room as they consider dividend stocks to make up for low yields in today's fixed-income environment. Two names I like here include Sirius XM Radio (NASDAQ: SIRI) and Upbound (NASDAQ: UPBD). Both dividend stocks could benefit from the June 17 decision to hold interest rates steady. Let's take a closer look at these two high-yielding stocks.

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1. Sirius XM

The country's lone player in premium satellite radio has been a surprising winner this year. Sirius XM is up 42% in 2026, as income investors gravitate toward this free cash flow generator that's showing signs of turning the corner. Even after the stock's pop, Sirius XM's attractive 3.8% yield is higher than that of the top money market funds.

You may think satellite radio as a premium platform peaked years ago, and you're right. Total subscribers for the service have fallen from its all-time high six years ago, but it's not as bad as you think. Today's total of 33 million subscribers is just 6% below the platform's peak. Revenue is less than 5% below its all-time high set in 2022, and adjusted net income has never been higher.

This media stock is a money machine. Sirius XM expects to generate $1.35 billion in free cash flow this year. It's returning most of that money to shareholders through its chunky dividend and aggressive stock buybacks. The former is keeping income investors close. The latter is helping to prop up per-share profitability to today's record level.

Why does holding interest rates steady help Sirius XM? It's an entertainment platform primarily consumed in cars and trucks, and the last thing it needs is higher interest rates scaring away potential new-car buyers.

Sirius XM is starting to get better. After three years of modest top-line declines, revenue has risen marginally in back-to-back quarters.

2. Upbound

Despite its torrid run this year, you can still buy Sirius XM for just nine times forward earnings. If you want something with an even lower multiple, try Upbound on for size. The parent company of Rent-A-Center expects to earn between $4.00 and $4.35 a share in 2026. At its current price, Upbound enters the new trading week trading just shy of five times this year's adjusted earnings.

If Sirius XM's dividend is impressive, Upbound's current yield of 7.6% is more than double what the top money market funds are shelling out these days. Still, there's a lot of debt on its balance sheet. As you can probably guess by its flagship rent-to-own retail concept, it's at the mercy of cash-strapped customers who frequently default on the furniture, appliances, and consumer electronics they pick up on lease-to-own arrangements.

But this business still isn't getting the respect it deserves, given its high payout and low valuation. It's still growing. Revenue rose just 4% in its latest quarter, but that follows back-to-back years of 8% and then 9% revenue growth.

This story is also about more than just the namesake concept. It's a player in enterprise software through Acima, a software platform that lets other merchants offer lease-to-own purchase options that include Upbound. Its fastest-growing segment is Brigit, a well-rated budgeting smartphone app that saw a 40% revenue increase in its latest quarter.

Upbound's advantage from steady rates is fairly obvious. Its clientele is vulnerable to shifts in borrowing costs. If rates move higher, it wouldn't be a surprise to see business either slow down or default rates creep higher.

Rick Munarriz has positions in Upbound Group. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.