As U.S. markets tumbled again on signs of inflationary pressures, investors worried about continued volatility can consider a targeted ETF strategy.
Investors are refocused on the recent spike in inflation and whether or not rising consumer prices will stick around. Many are worried that the prolonged period of faster growth in prices could push the Federal Reserve to hike interest rates or curb its accommodative monetary policy sooner than expected, which has weighed on stocks and other assets that have benefited from the low-rate environment.
“We see this as transitory, but you never know: there is stuff in here that could take a bit longer,” Lars Skovgaard Andersen, investment strategist at Danske Bank Wealth Management, told the Wall Street Journal. “There will be some volatility in markets still.”
Fed officials, though, argue that it is too soon to be concerned. Federal Reserve Bank of Atlanta President Raphael Bostic said he wasn’t ready to dial back support for the economy. Bostic also downplayed fears over rising prices and contended that it could take months to see a rising inflation trend.
