What is core PCE inflation?

Core PCE (Personal Consumption Expenditures) inflation is the Federal Reserve's preferred measure of inflation, currently sitting at 2.9%. It excludes volatile food and energy prices to provide a clearer picture of underlying inflation trends. This measure is well above the Fed's 2% target, indicating persistent inflationary pressures in the economy.

What does pricing power mean for companies?

Pricing power is a company's ability to raise prices without losing customers. Companies with strong brands, essential services, or dominant market positions can pass inflation costs onto consumers rather than absorbing them into their margins. This capability becomes invaluable during inflationary periods when input costs rise across the economy.

How do banks benefit from higher interest rates?

Banks and financial institutions benefit from higher interest rates through wider net interest margins. They can charge more for loans whilst paying relatively less on deposits, potentially leading to higher profits. This creates a favourable environment for financial companies when rates remain elevated for extended periods.

Best inflation-resistant investments 2024?

Inflation-resistant investments include financial institutions like Enova International (ENVA) and Triumph Financial (TFIN), which benefit from higher lending spreads. The Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) offers sophisticated inflation protection through active interest rate volatility management rather than traditional inflation-protected bonds.

Should I invest in inflation-resistant stocks now?

With core PCE inflation at 2.9% and likely to remain elevated, inflation-resistant investments could be well-positioned. However, all investments carry risk, including potential economic slowdown and customer pushback against higher prices. Consider your risk tolerance and investment timeline before making decisions.

What are the risks of inflation hedge investments?

Inflation-resistant investments face several risks including economic recession from rising rates, customer resistance to price increases, and credit risk for financial institutions. Higher rates that boost margins today could lead to loan losses if borrowers struggle to repay. These investments are positioned for current conditions, not guaranteed winners.

How long will inflation stay above 2%?

Core PCE inflation's persistence at 2.9% suggests the Fed will likely maintain restrictive monetary policy for an extended period. The central bank's commitment to reaching its 2% target means higher rates could continue, creating a sustained runway for inflation-resistant investments to potentially outperform traditional growth stocks.

Why are traditional growth stocks struggling?

Traditional growth stocks that thrived in the ultra-low rate environment of the past decade now face headwinds from higher interest rates. The structural shift away from zero-rate policies creates challenges for these companies, whilst businesses with pricing power and financial institutions positioned for higher rates could see sustained outperformance.

What is IVOL ETF strategy?

The Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) actively manages interest rate volatility whilst providing inflation protection. Unlike traditional inflation hedges that often fall short during extended restrictive policies, IVOL's sophisticated approach manages both interest rate risk and inflation exposure simultaneously.

Can I buy fractional shares of inflation stocks on Nemo?

Yes, Nemo offers fractional shares of inflation-resistant investments starting from just £1. The ADGM-regulated platform provides commission-free investing with AI-driven insights, making it accessible for investors to build exposure to companies that benefit from the current inflationary environment rather than suffer from it.

When Inflation Stays Stubborn: The Investment Case for Pricing Power

• 5 min read

• Published on 28 September 2025

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When Inflation Stays Stubborn: The Investment Case for Pricing Power

• 5 min read

• Published on 28 September 2025

Summary

Core PCE inflation at 2.9% suggests interest rates may remain high, favouring specific investments.
Inflation-resistant investments often include firms with strong pricing power to protect profit margins.
Financial stocks may benefit from higher interest rates through wider net interest margins.
ETFs can provide a broad hedge against persistent inflation and interest rate volatility.

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View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

Still Worried About Inflation? Perhaps You Should Be.

I keep hearing whispers that the great inflation panic is over. That we’ve slain the beast and can all go back to enjoying the cheap money party of the last decade. To which I say, have you looked at the numbers lately? The US Federal Reserve’s favourite little metric, the Core PCE, is stubbornly sitting at 2.9 percent. That’s a country mile from their cosy 2 percent target, and it tells me this story is far from finished.

This isn’t just a tedious statistic for economists to argue over. It’s a signal. It suggests that the central bankers will keep interest rates elevated for longer than many would like. For a lot of businesses, that’s a slow and painful squeeze. But for a select few, it’s a golden opportunity. The trick, as ever, is figuring out which is which.

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

The Simple Magic of Pricing Power

In times like these, the most valuable asset a company can have isn’t a flashy new technology or a charismatic CEO. It’s something far more fundamental, pricing power. It’s the ability to look your customers in the eye, tell them the price has gone up, and have them pay it without flinching. Think of your favourite coffee shop versus the generic chain. One can nudge its prices up and you’ll grumble but still buy your flat white. The other tries it, and you’ll just walk down the road.

Companies that can pass on rising costs, rather than absorbing them and watching their profits wither, are the ones that could navigate this environment rather well. They have built a moat around their business, whether through a powerful brand, an essential service, or a dominant market position. They don’t just survive inflation, they can make it work for them.

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

When Higher Rates Are Good News

Nowhere is this clearer than in the financial sector. For years, banks were dreadfully dull investments, crushed by zero-percent interest rates. Now, the tables have turned. Higher rates mean they can charge more for loans whilst the interest they pay out on deposits lags behind. That gap, the net interest margin, is where they make their money. A wider gap could mean healthier profits.

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

View the full Basket:Inflation-Resistant Investments | Core PCE at 2.9%

17 Handpicked stocks

Hey! We are Nemo.

Download the App

Scan the QR code to download the Nemo app and start investing on Nemo today

Invest Today on Nemo

When Inflation Stays Stubborn: The Investment Case for Pricing Power

When Inflation Stays Stubborn: The Investment Case for Pricing Power

Summary

Still Worried About Inflation? Perhaps You Should Be.

The Simple Magic of Pricing Power

When Higher Rates Are Good News

Summary

Still Worried About Inflation? Perhaps You Should Be.

The Simple Magic of Pricing Power

When Higher Rates Are Good News

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