According to the latest cash rate futures, the market is pricing in a 49% probability of a rate cut by the Reserve Bank in February.
If the central bank makes a cut, it will take the cash rate down to a record low of 0.5%.
Unfortunately for savers and income investors, the interest rates on other interest-bearing assets are likely to follow the cash rate lower soon after.
But don't worry, because these top ASX dividend shares still offer generous dividend yields:
Telstra Corporation Ltd (ASX: TLS)
I think this telco giant could be a good option for income investors. Times have been hard for Telstra, but with the NBN rollout nearing completion and Telstra cutting costs materially, I remain confident that a return to growth is close. As a result, I am confident its 16 cents per share dividend is as low as it will go and no further cuts will be necessary. This equates to a fully franked 4.5% dividend yield.
Transurban Group (ASX: TCL)
Another dividend share to consider buying is this toll road operator. Transurban owns a number of key roads across Australia and North America. And with congestion on arterial roads getting worse each year, its toll roads are continuing to experience growing traffic numbers. Combined with periodic toll increases, this is supporting solid income and distribution growth. In FY 2020 it will be no exception, with Transurban planning to increase its distribution to 62 cents per security. This works out to be a forward 4.15% distribution yield.
Wesfarmers Ltd (ASX: WES)
I think this conglomerate's shares could be another good option for income investors. Especially with the housing market recovering strongly. This should be a big positive for the company due to its exposure to the housing market through the Bunnings, Kmart, and Target brands. This could lead to solid earnings growth and support further dividend increases. For now, I estimate that Wesfarmers will pay a FY 2020 dividend of $1.53 per share. This equates to a fully franked 3.7% dividend yield.
