What is pricing power in investing?

Pricing power is a company's ability to pass rising costs directly to consumers without losing market share. Companies with genuine pricing power can raise prices on their products or services during inflationary periods whilst maintaining demand, protecting their profit margins when input costs increase.

What is core PCE inflation?

Core PCE (Personal Consumption Expenditures) is the Federal Reserve's preferred inflation gauge, currently sitting at 2.9% - well above the Fed's 2% target. It measures price changes for goods and services consumed by households, excluding volatile food and energy prices.

How do energy companies benefit from inflation?

Energy companies like Exxon Mobil don't just benefit from inflation - they often drive it. When oil prices rise due to inflationary pressures, their revenues soar whilst production costs remain relatively stable, creating beautiful margin expansion that boosts profitability.

Best inflation resilience stocks to buy?

Top inflation-resistant stocks include Exxon Mobil (XOM) for energy exposure, PepsiCo (PEP) for consumer staples with proven pricing power, and ConocoPhillips (COP) for disciplined energy operations. These companies have demonstrated the ability to thrive during inflationary periods through strong pricing power.

Why invest in consumer staples during inflation?

Consumer staples like PepsiCo offer predictable demand regardless of economic conditions. People need food and beverages even when prices rise, and established brands can increase prices without meaningful demand destruction due to decades of brand building and emotional consumer connections.

How do banks profit from higher interest rates?

Financial institutions benefit from higher rates through wider net interest margins - the difference between what they pay on deposits and charge on loans. Well-positioned banks with strong deposit franchises can expand profitability when rates rise, unlike most other sectors.

Inflation resilience portfolio risks?

Key risks include energy sector volatility, potential economic downturns affecting consumer staples, and credit risks for financial institutions. The biggest threat is a sudden Fed policy shift - if inflation drops rapidly or rates are cut aggressively, these positioning advantages could disappear.

When to invest in inflation hedge stocks?

With core PCE inflation stubbornly at 2.9% and the Fed maintaining hawkish stance, now appears opportune for inflation-resistant positioning. These defensive stocks are designed for environments where inflation remains persistently above target and interest rates stay elevated for longer periods.

Why is inflation staying above 2% target?

Core PCE has been sitting at 2.9% for months, representing a full percentage point above the Fed's target. This isn't the transitory blip policymakers once hoped for - it's becoming the new normal, creating persistent inflationary pressures across the economy.

How does Fed policy affect different sectors?

The Fed's hawkish stance creates winners and losers. Traditional growth stocks get hammered by higher rates, whilst companies with pricing power and financial institutions actually benefit. Energy and consumer staples with essential products tend to outperform during such monetary tightening cycles.

Fractional shares inflation resilience investing?

Nemo offers fractional shares starting from just £1, making defensive inflation-resistant stocks accessible to all investors. You can build a diversified inflation resilience portfolio with small amounts through commission-free investing and AI-driven research on the ADGM-regulated platform.

The Inflation Resilience Portfolio: Why These Stocks Could Weather the Storm

• 5 min read

• Published on 27 September 2025

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The Inflation Resilience Portfolio: Why These Stocks Could Weather the Storm

• 5 min read

• Published on 27 September 2025

Summary

Build an inflation-resilient portfolio with stocks possessing strong pricing power.
Energy sector shares may offer a hedge as rising oil prices fuel inflation.
Consumer staples companies can protect margins by passing costs to consumers.
Certain financial stocks could see improved profitability from higher interest rates.

Zero commission trading

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

A Pragmatist's Guide to Stubborn Inflation

Let’s be honest, shall we? The whole “transitory inflation” narrative was a lovely bit of wishful thinking, but reality has a nasty habit of gatecrashing the party. With core inflation stubbornly refusing to dip below the 2.9% mark, it seems the central bankers’ headache is here to stay. For most investors, this is cause for a stiff drink and a long, hard look at their bleeding portfolios. But for those of us with a more cynical, or perhaps realistic, view of the world, it presents a rather interesting puzzle.

So, what’s an investor to do when the cost of everything from a pint of milk to a tank of petrol keeps climbing? You could bury your head in the sand, or you could start thinking about which companies actually benefit from this mess.

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

The Magic of Not Being Hated

The secret, if you can call it that, is something called pricing power. It’s a simple concept. It’s the ability of a company to raise its prices without its customers storming off in a huff. Think of your local coffee shop. If they put the price of a flat white up by 20p, you’ll grumble, but you’ll almost certainly pay it. You need the caffeine. That, in a nutshell, is pricing power.

In an inflationary world, this isn't just a nice-to-have, it’s a survival mechanism. Companies that sell things people need, or desperately want, can pass on their own rising costs directly to you and me. Their margins stay healthy, their profits remain robust, and their shareholders sleep a little easier at night.

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

The Usual Suspects

When you start looking for these inflation-proof businesses, a few obvious candidates emerge. Take the energy giants, for instance. Companies like Exxon Mobil and ConocoPhillips don't just weather inflation, they often create it. When the price of oil goes up, their revenues soar whilst their costs to pull it out of the ground remain relatively fixed. It’s a beautiful, simple equation that works wonderfully in their favour. They’ve become far more disciplined than in previous cycles, focusing on shareholder returns rather than reckless expansion.

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

View the full Basket:Inflation Resilience Portfolio Explained

16 Handpicked stocks

View the full Basket:Inflation Resilience Portfolio Explained

16 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

The Inflation Resilience Portfolio: Why These Stocks Could Weather the Storm

The Inflation Resilience Portfolio: Why These Stocks Could Weather the Storm

Summary

A Pragmatist's Guide to Stubborn Inflation

The Magic of Not Being Hated

The Usual Suspects

Summary

A Pragmatist's Guide to Stubborn Inflation

The Magic of Not Being Hated

The Usual Suspects

A Strategy for the Real World

Deep Dive

Market & Opportunity

Key Companies

Primary Risk Factors

Growth Catalysts

How to invest in this opportunity

Frequently Asked Questions

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