Good time to look at high-yield stocks as cushion to inflation-triggered volatility

Atiqah Mokhtar
Atiqah Mokhtar12/9/2021 02:58 PM GMT+08  • 8 min read
Good time to look at high-yield stocks as cushion to inflation-triggered volatility
JPMAM believes it is a good time for investors to look at high-yield stocks as a way to cushion against volatility.
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Data released by the US Department of Labor last month indicated that consumer prices jumped 6.2% y-o-y in October, the steepest rise since December 1990. Core inflation, which excludes energy and food prices that tend to be more volatile, came in at 4.6% — its highest since 1991.

The data marked another troubling sign that inflation may persist, contradicting the “transitory” label the Federal Reserve (Fed) had used to describe price pressures. For months, price increases had been rationalised as a temporary outcome of surging demand as the economy recovers from the Covid-19 pandemic, supported by the Fed’s multiple stimulus packages.

However, as supply chain disruptions and rising energy and commodity prices compounded inflationary effects in the past months, the narrative of elevated inflation being a temporary issue has been increasingly contested.

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