Exxon, P&G, U.S. Bank: Stocks To Buy As The Fed Projects Higher Inflation

Exxon, P&G, U.S. Bank: Stocks To Buy As The Fed Projects Higher Inflation

U. S. inflation has been trending higher, as abundant liquidity, soaring demand following Covid-19 lockdowns, and supply-side constraints are putting pressure on prices. On Wednesday, the Federal Reserve considerably raised its expectations for inflation for 2021, projecting that prices for personal consumption expenditures - its preferred inflation measure - could rise 3. 4% this year, a full percentage point ahead of its March projection of 2. 4%. The central bank didn't make any changes to its aggressive bond-buying program and also indicated that interest rates will continue to remain near 0%, although it signaled two rate hikes in 2023. So how should equity investors play the current inflationary environment and the prospect of higher interest rates? Our theme on Stocks To Play Rising Inflation includes stocks from the banking, insurance, consumer staples, and energy sector that could remain stable or potentially even gain from higher inflation rates. The theme has outperformed, returning about 17% year-to-date, compared to a return of just about 13% on the S&P 500. However, it has underperformed since the end of 2019, remaining roughly flat, compared to the S&P 500 which is up by about 31%. Oil and gas major Exxon Mobil XOM has been the