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The U.S. economy has been doing particularly well of late, with barometers of manufacturing, services, outlays, and hiring showing signs of improvement. Demand for new orders drove manufacturing activities. Meanwhile, the reopening of businesses and relaxation of stringent norms to curb the spread of coronavirus helped the U.S. service sector regain strength.

Consumers, in the meanwhile, continue to be upbeat about their financial conditions and have bumped up spending lately. Job additions are also happening at a steady clip, with the jobless rate dropping to 6% in March, as mentioned in a Bloomberg article.

Of course, with the economy showing unprecedented strength, investors are anxious about the rise in the inflation rate. However, the Fed in its recently concluded two-day policy meeting remained fairly dismissive about the risks of higher inflation for now. Needless to say, the Fed had earlier confirmed that there may be a slight bump in inflation this year but it will be short-lived.

In fact, the Fed has yet again reassured to keep the benchmark federal funds rate near zero to help the economy recoup from the pandemic. This is because, despite the economy showing signs of progress, the central bank believes that many Americans are jobless and cash-strapped, which surely calls for an accommodative monetary policy at the moment.

The Fed has kept its benchmark interest rate at zero to 0.25%, where it has been since the pandemic ravaged the economy almost a year earlier, citing a livemint article. Such an ultra-low interest rate policy is ought to encourage borrowing and spending, something that bodes well for the economy vis-à-vis the stock market.

In fact, from an investment standpoint, it’s prudent to search for stocks that directly benefit from a low-interest-rate environment. Utility stocks are no doubt rate-sensitive. Being capital intensive in nature, utility-related companies have high debt levels. A low-interest-rate environment will certainly help such companies pay off debts and register profits. This in turn will boost their credit ratings, which should help them borrow more funds at a cheaper rate from the markets.

Similarly, gold mining stocks are positioned to benefit in a low-interest-rate scenario. This is because low rates make fixed-income investments like bonds less alluring. Likewise, gold prices do increase on dovish expectations.

Thus, it shouldn’t be a bad proposition for investors to watch out for stocks that are well-poised to gain from a dovish Fed. Here’re five of them –

Middlesex Water Company (MSEX Quick Quote MSEX - Free Report) treats, stores, and distributes water for residential, commercial, industrial, and fire prevention purposes. The company currently has a Zacks Rank #3 (Hold). The company’s expected earnings growth rate for the current and next year is 4.6% and 6.1%, respectively.

MYR Group, Inc. (MYRG Quick Quote MYRG - Free Report) is a holding company of leading specialty contractors serving the electrical infrastructure market throughout the United States. The company currently has a Zacks Rank #2 (Buy). The company’s expected earnings growth rate for the current and next year is 4.6% and 13.2%, respectively.

California Water Service Group (CWT Quick Quote CWT - Free Report) is a publicly-traded water utility in the United States, providing high-quality utility services to millions of people in communities. The company currently has a Zacks Rank #2. The company’s expected earnings growth rate for the current quarter is a whopping 300%. 

Newmont Corporation (NEM Quick Quote NEM - Free Report) is one of the world’s largest producers of gold, with several active mines in Nevada, Peru, Australia, and Ghana. Newmont’s operating segments are North America, South America, Australia, and Africa. The North America segment has operations in the United States. The company currently has a Zacks Rank #3. The company’s expected earnings growth rate for the current and next year is 33.5% and 3.9%, respectively.

FrancoNevada Corporation (FNV Quick Quote FNV - Free Report) operates as a gold-focused royalty and stream company. The company generates around 86% of revenues from the Americas (Latin America 49%, the United States 18%, and Canada 19%) and 14% from the rest of the world. The company currently has a Zacks Rank #2. The company’s expected earnings growth rate for the current and next year is 18.8% and 5.6%, respectively.