Every month, investors get several key economic indicators that report the trajectory of inflation. The consumer price index (CPI) and the personal consumption expenditure (PCE) index tracks the rate of increase in the prices paid by consumers for goods and services. 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 reached highs that hadn't been reached in nearly 40 years. That means many investors had never experienced inflation reaching that level. 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 2021 and 2022, higher inflation is an opportunity for some stocks. In this special presentation, we're highlighting seven stocks that can deliver solid gains for investors even if inflation stays higher for longer.
Click the "Continue to Slide #1" button to view the first company.
