While bond yields have been rising recently, it remains unlikely that interest rates will rise enough in the near term to make life easier for income investors.
In fact, according to the latest Westpac Banking Corp (ASX: WBC) weekly economic report, the banking giant's economics team expects the cash rate to remain at 0.1% until at least the end of 2022.
Westpac has also ruled out rate hikes in the United States in the near term after an eventful week.
It commented: "While we continue to believe that growth in the US will run at almost three times potential through much of this year and still be above potential during 2022, we do not see a taper of asset purchases until the second half of next year, and federal funds rate hikes for a long while after that given the severe excess capacity that needs to be put to work."
This is also expected to support the Australian dollar versus the US dollar, sending it above 80 U.S. cents by September and keeping it there until at least the start of 2023.
It explained: "Along with the sentiment boost that the global recovery will bring, US policy developments are expected to see the Australian dollar uptrend of the past year remain in place into 2022."
In light of this, dividend shares look set to remains the best financial assets to generate a passive income with.
But which ASX dividend share should you buy?
One ASX dividend share which has been tipped as a buy is Westpac rival Australia and New Zealand Banking GrpLtd (ASX: ANZ).
According to a recent note out of Morgans, its analysts currently have an add rating and $31.00 price target on the bank's shares.
In addition to this, the broker is forecasting a $1.45 per share fully franked dividend in FY 2021.
Based on the current ANZ share price of $28.84, this means it offers income investors a fully franked 5% dividend yield.
This is vastly superior to anything you'll receive from ANZ or Westpac's term deposits or savings accounts.
