What does it mean when the Fed fights inflation?

When the Federal Reserve fights inflation, it uses tools like interest rates to slow down price increases across the economy. By keeping rates high, the Fed makes borrowing more expensive, which can cool economic activity and help bring inflation under control.

How do tariffs drive inflation?

Tariffs are taxes on imported goods that make foreign products more expensive for consumers. When tariffs are imposed, the higher costs are often passed on to shoppers, leading to increased prices across various goods and contributing to overall inflation.

What is pricing power and why does it matter?

Pricing power is a company's ability to raise prices without losing customers. Companies with strong pricing power can maintain their profit margins even when their costs increase, making them more resilient during inflationary periods.

Why are low debt levels important in a high-rate environment?

Companies with low debt levels have less exposure to rising interest rates because they don't need to pay as much in borrowing costs. This gives them a competitive advantage when rates are high, as heavily indebted companies face higher financing expenses.

What makes a business model resilient to economic pressures?

Resilient business models typically involve providing essential goods or services that people need regardless of economic conditions. These companies often have steady demand, loyal customers, and the ability to maintain revenue even during challenging times.

18 handpicked stocks

Fed Rate Policy 2025: Inflation-Resistant Stocks

The Federal Reserve is holding interest rates steady, prioritizing the fight against tariff-driven inflation over employment risks. This creates an investment opportunity in companies that are well-equipped to handle a high-interest-rate environment and persistent inflation.

Han Tan | Market Analyst

Updated 1 day ago | Published at August 22