According to data released by the US Commerce Department on the 25th, the US PCE price index (personal consumption expenditure, a measure of inflation by the Federal Reserve) rose 6.1 per cent in January from a year earlier, with an expected increase of 6 per cent and a previous increase of 5.8 per cent. The core PCE price index in the United States rose 5.2% in January from a year earlier, the highest rate since 1983.

With a number of economic data to be released in the US, they are expected to provide clues to assess whether and how much the Fed will raise interest rates before its next monetary policy meeting.

Forexlive, a financial website, said the Omicron-related outbreak distorted some data in January and further tightened some supply chains, but that did not drag down consumers. Consumption is strong and prices continue to rise.

Analysts said that although the conflict between Russia and Ukraine is coming to an end, it is not over after all, and the impact of the data may be limited, but in the long run, the market focus will eventually return to the Fed's tightening expectations.

In addition, as the potential threat of a full-scale Russian invasion of Ukraine increases the risk of a shock to energy supplies, some market watchers predict that US inflation could soar to 10 per cent at some point from 7.5 per cent in January.

Economist: the crisis in Russia and Ukraine may push US inflation through 10%

Joseph Brusuelas, chief economist of RSM, a US consulting firm, believes that the escalation of the conflict between Russia and Ukraine will make the United States "trapped in the trap of high inflation."

Joseph Brusuelas believes that the energy shock caused by the Russian-Ukrainian crisis will reduce US gross domestic product (GDP) by 1 per cent in the coming year and raise inflation by 2.8 per cent over the next three to six months.

Joseph Brusuelas said that there is clearly some uncertainty in the response to the full outbreak of the conflict between Russia and Ukraine in the global energy market.If there is a war, the price of cloth oil is expected to be $110, 14% higher than the price on Tuesday. In another case, he said, oil prices could even rise by 40 per cent, which in turn would push CPI in the US further above 10 per cent.

"Today, headline inflation is more likely to exceed market consensus and the 2021 figure, which is expected to reach 10 per cent. All this will be defined by the direction of energy prices. By energy, I mean oil, natural gas and a range of other things, even the price of coal. "

If US inflation reached 10 per cent, it would be the highest level since October 1981. Analysts believe that if the conflict between Russia and Ukraine breaks out in full, inflation in the United States will reach 8% in March, and when the dust settles, it is not expected that the inflation rate will fall to about 4% in January 2023.

Even as analysts issued the warning, the world's largest asset manager reiterated its view thatCentral banks may be forced to "put up" with inflation.

Jean Boivin, director of the Blackrock Investment Research Institute (BlackRock Investment Institute), and others wrote in a report on Tuesday that the Fed may be forced to coexist with high inflation because using aggressive monetary policy to combat supply-driven inflation "will only undermine economic activity that has not yet fully recovered."

Traders: inflation has had the greatest impact on global markets this year

On Wednesday, according to JPMorgan Chase & Co's annual survey of institutional trading clients, traders said inflation had the greatest impact on global markets this year, while liquidity was the biggest challenge for daily trading for the sixth year in a row.

In JPMorgan Chase & Co's survey of trading clients of 718 institutions, about 48 per cent stressed that "inflation" was the biggest factor affecting the global market this year. "Economic chaos" and "epidemic situation" are the next most influential factors, with 13% respectively.

Expectations of an imminent rate hike by central banks have been rising since the end of last year and have continued to rise as many countries show high inflation.

"this concern and concern may lead to more market activity and volatility, because inflation has not been the subject of concern for more than a decade," said Scott Wacker, head of e-commerce sales at JPMorgan Chase & Co FICC. "

With high inflation, how can the success rate of trading be higher?

Against the backdrop of high inflation, demand for investment in the inflation-linked secondary market has surged, and investors want to hedge against rising prices. So, how should investors invest? Which industry sectors can fight inflation?

1. ETF betting on rising inflation

ETF, a theme related to "inflation", attracted a lot of money at the beginning of the year. At the same time, some of the same type of ETF are speeding up the pace of listing.

Listed in December last year, named directly after the producer Price Index (PPI).$AXS ASTORIA INFLATION SENSITIVE ETF (PPI.US) $Recorded this year4%The rate of increase.

All ETF with the word "inflation" in its name or ETF description recorded inflows last year, according to data compiled by Bloomberg.

Four of the ETF's returns exceeded the latest CPI reading of 7 per cent in 2021. They are:

• $VanEck Vectors Real Asset Allocation ETF (RAAX.US) $，21.56% increase in 2021

• $HORIZON KINETICS INFLATION BENEFICIARIES ETF (INFL.US) $，24.76% increase in 2021

• $FIDELITY STOCKS FOR INFLATION ETF (FCPI.US) $，34.19% increase in 2021

• $ProShares inflation expectations ETF (RINF.US) $，It rose 16.21% in 2021.

2. Stocks that are expected to resist rising inflation

Although stock markets generally underperform in the face of high inflation, there are still profit opportunities in individual sectors at the industry level. Some fund managers have pointed out that some sectors that benefit from rising prices and profits will benefit relatively under inflation expectations:

First of all, pay attention to offensive assets, that is, a kind of assets in which the price of the product can rise and the gross profit margin can expand.Secondly, pay attention to defensive assets, we can look for assets with high dividend yield and good stability of dividend rate in the market, and offset the upward pressure of real interest rate through the strategy of high dividend yield, so as to maintain the stability of the portfolio.

Generally speaking, commodities, agricultural products, financial stocks and real estate are the beneficiaries of the upward phase of inflation.

(1) Nonferrous metals

铝：

• $Alcoa (AA.US) $、$Aluminum Corporation Of China Ltd (ACH.US) $

• Century Aluminum (CENX.US) $、$Caesar Aluminum (KALU.US) $

铜：

• $McMoran Gold (FCX.US) $、$Southern Copper (SCCO.US) $

• $Hudbay Minerals (HBM.US) $

• $Turquoise Hill Resources (TRQ.US) $

Gold:

• $Newman Mining (NEM.US) $、$Barrick Gold (GOLD.US) $

• $SPDR Gold ETF (GLD.US) $
  

(2) Oil and gas plate

Petroleum:

• $Exxon Mobil Corp (XOM.US) $、$Chevron Corp (CVX.US) $

• $ConocoPhillips (COP.US) $、$BP P.L.C. (BP.US) $

• $EOG Energy (EOG.US) $、Vanguard Natural Resources (PXD.US) $

• $Marathon Oil (MRO.US) $

Natural gas:

• $Williams (WMB.US) $、$Amenon (AEE.US) $

(3) Coal plate

• $Azi Coal (ARCH.US) $

• $Peabody Energy Corporation (BTU.US) $

• $Alliance Resource Partners LP (ARLP.US) $

• $Natural Resource Partners LP (NRP.US) $

(4) Agricultural products

• $Tyson Foods (TSN.US) $、$Bunge (BG.US) $

• $Dole Food (DOLE.US) $

• $Archer Daniels Midland (ADM.US) $

• $Cal-Maine Foods (CALM.US) $

(5) Financial industry

• $Wells Fargo & Co (WFC.US) $、$HSBC Holdings PLC (HSBC.US) $
  

• UBS (UBS.US) $、$Citigroup Inc (C.US) $
  

• $Bank of America Corporation (BAC.US) $、Barclays Bank (BCS.US) $
  

• $JPMorgan Chase & Co (JPM.US) $、$Morgan Stanley (MS.US) $
  

(6) High dividend assets

• $Vale SA (VALE.US) $、$Petroleo Brasileiro SA Petrobras (PBR.US) $
  

• $Rio Tinto PLC (RIO.US) $、$BHP Group Ltd (BBL.US) $

Buffett teaches you how to fight inflation

In a letter to shareholders in 1981, Buffett mentioned that two types of companies acquired by his Berkshire Hathaway had bright results, one of which happened to be well adapted to the inflationary environment. Such enterprises must have two characteristics:

• (1) the ability to raise prices easily without worrying about a significant decline in market share and unit output (even when product demand is stable and production capacity is not fully utilized)

• (2) the ability to reconcile a significant increase in corporate output (more due to inflation than real growth) with less need for additional capital investment.

Buffett thinksWhether a company needs a lot of money to maintain its operation and profitability is an indicator that investors should pay close attention to.而The ability of an enterprise to price its goods is the primary indicator used to evaluate the company's business.If a company can raise the price without losing customers, it is doing well.

Last,Investors also need to pay attention to whether a company needs to rely on loans to keep growing.After all, high inflation is bound to lead to higher interest rates. As a result, growth companies that often borrow to achieve growth are more vulnerable.