While many states are experiencing heat waves right now, pressure is heating up to tamp down prices that are rising at their fastest pace in a generation.
In recent weeks, the Federal Reserve raised its benchmark interest rates by 75 basis points.
It’s the fourth time the central bank has raised rates this year to fight inflation, which currently stands at 9.1%. That’s a 41-year high.
Research analyst Sam Blumenfeld says the Fed is walking a tight rope, tackling demand to deal with surging costs and trying to do it without kickstarting a recession:
The Federal Reserve’s policy is the number one driver of the market right now. It has a significant impact on the economy and inflation.
It’s aiming to reduce inflation at the cost of slowing down the economy.
It’s definitely a balancing act for the Fed because they’re forced to take measures to reduce inflation without going so far as to tipping the economy into a full-blown recession.
We’re definitely seeing recession-area indicators that are spooking economists and the market, in general.
Sam works closely with commodities expert Sean Brodrick on his trading services, including Wealth Megatrends.
Members are sitting on double-digit percentage gains on an auto manufacturer, a consumer cyclicals stock and more, and all the positions in that publication spin off dividends … which essentially serve as passive income for investors.
Sean is also the editor of Supercycle Investor, where members of that premium service are sitting on open gains of 92%, 35% and nearly 22%.
In its recent meeting, the Fed noted that the pandemic’s supply-chain issues have continued to push prices higher, and that the Russia-Ukraine war is putting added pressure on food and energy prices.
In today’s special three-minute video segment, Sam discusses how these price spikes are tailor-made for certain companies, and separately, the stocks that investors should consider if and when a recession hits.
He says in a volatile market environment to focus on stocks that are dividend raisers with attractive yields:
Dividend stocks are companies with stable cash flows that basically pay you to own them.
They ride the wave up with the broader market, but they also provide downside cushioning with their quarterly payouts.
Companies that raise their dividends are ones that you know are going to be around for the long haul.
Within the S&P 500, dividend raisers have vastly outperformed those that have not paid a dividend, and those that have kept them the same over time.
Sam and I also explore:
- A recession-resistant stock on the rise.
- An exchange-traded fund outperforming the S&P 500 index.
- Why the broad market is pricing in “hopefulness.”
And more.
The information in this short segment couldn’t be timelier. Just go to the video box above to watch it now.
Happy investing!
Jessica Borg
Financial News Anchor
Weiss Ratings
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