Stagflation Trade Is Back: Goldman Flags Inflation Risk As Growth Slows—ETFs To Navigate The Forecast
A stagflation-like setup, in which inflation rises even as growth weakens, is beginning to take shape, and Goldman Sachs is anticipating it. The bank has raised its U.S. inflation forecast while lowering its growth outlook for this year, pointing to persistent energy-driven price pressures and rising downside risks to economic activity. For markets, this is a difficult mix. Inflation erodes purchasing power, while slowing growth weighs on corporate earnings. So far, investors appear to be pricing in the inflation shock—but not fully the growth slowdown that could follow. That gap is where ETF strategies come into play. Inflation Hedges: Commodities, Energy And TIPS Back In Focus Goldman Sachs warns U.S. inflation can hit 4.9% by this spring if current disruptions persist . If this happens, it could hinder the Fed's strategic moves to bring inflation back to its 2% target. With energy prices being a major contributor to the inflation surprise, commodity ETFs are regaining traction. Broad commodity funds that include crude oil exposure, as well as energy sector ETFs, directly benefit from supply chain issues and high energy costs. For a more targeted exposure, investors may look at ETFs that track crude oil futures , such as the United States Oil Fund (NYSE: USO ), or energy sector ETFs such as the Energy Select Sector SPDR Fund (NYSE: XLE ) that tracking a group of major oil and gas companies that benefit from oil price spikes, like Exxon Mobil Corp Full story available on Benzinga.com
