Fidelity Sees Inflation Staying, Points to 4 Market Sectors

Fidelity International says inflation has settled into markets as a structural force rather than a passing shock. It identified 4 areas investors can look to.

The investment management firm's list includes banks, artificial-intelligence supply chains, power-supply businesses, and gold.

Why Fidelity Thinks Structural Inflation Is Here to Stay

Government deficits, artificial intelligence (AI) capital spending, tight labor markets, trade barriers, and energy disruptions all underlie the firm's structural inflation call.

"Inflation increasingly appears here to stay, rather than being a short-lived phenomenon," the firm said.

Developed economies are now in a sixth consecutive year above target, according to Fidelity. The firm argues that central bankers "might have declared a premature victory."

US data supports part of that argument. Consumer prices held at 3.4% in the 12 months through July, well above the Federal Reserve's 2% goal. Core inflation ran at 2.5%.

The equity guidance stays general. Within equities, the firm said to look to businesses that could benefit from rising prices and persistent supply shortages. Diversification, it adds, matters more when price pressure persists.

… Continue reading the full article at the original source below.