The latest Consumer Price Index (CPI) data showed prices increasing 5.4% in the past 12 months, the most significant CPI jump since August 2008. While Federal Reserve Chairman Jerome Powell has said he believes the recent inflation will pass due to pricing pressures on materials and wages, some economists, like former Treasury Secretary Larry Summers, are concerned it could stick around for a while. In the Fed’s most recent summary of economic projects from June, officials indicated there could be two rate hikes as soon as 2023 or sooner if inflationary pressures continue.
If inflation does linger and interest rates rise, one industry that could benefit is insurance. Insurance companies invest their unused capital to generate additional revenue, and buying bonds is a popular way to do that. Inflation can be hard to predict, so a good strategy for investors is to own solid long-term performers that could get an additional benefit from rising interest rates. Here are three stocks to consider.