Every month, investors get several key economic indicators that report the trajectory of inflation. The Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) Index measure the rate at which prices for goods and services purchased by consumers are rising. A separate report, the Producer Price Index (PPI), tracks the rate of increase in the cost for producers to produce their goods and services.
These reports are part of what the Federal Reserve uses to determine the course of interest rate cuts. When inflation is tracking above the Federal Reserve's preferred target of 2%, it may raise interest rates to cool down the economy. Conversely, if inflation is tracking lower than the 2% rate, the Fed may cut interest rates to stimulate economic activity.
In 2021 and 2022, all three measures hit levels not seen in nearly 40 years. That means many investors had never experienced inflation at such high rates. In 2023 and 2024, the rate of inflation has come down, but it's still above the Federal Reserve's target rate of 2%.
But just like in 2021 and 2022, higher inflation can create opportunities for certain stocks. In this special presentation, we highlight seven stocks that could deliver solid gains for investors, even if inflation stays higher for longer.
Click the "Continue to Slide #1" button to view the first company.
