Inflation trade
How to think about the inflation trade.
Wellow turned a belief about sticky services inflation into a structured thesis. The exposure map below covers commodities, real-asset beneficiaries, and the risks that would invalidate the call.
The thesis backing this page is being refreshed. Try generating one yourself with the topic on your mind.
Frequently asked
- Where do you want exposure if inflation stays elevated?
- Real assets (energy, commodities, infrastructure) and pricing-power equities tend to defend purchasing power best when services inflation persists. The thesis below ranks specific tickers and ETFs by exposure type so you can compare cleanly.
- TIPS vs commodities vs equities — which works best for sticky inflation?
- TIPS hedge headline CPI but lag when the inflation is concentrated in services and shelter. Commodities work for goods inflation but can lag services. Pricing-power equities (consumer staples, infrastructure operators) tend to defend best across the full inflation surface.
- Which sectors hold up under sticky services inflation?
- Energy and infrastructure cash-flowers, asset-light services with pricing power, and selectively financials with rate-sensitive net interest margins. Sectors to avoid: long-duration tech where DCF math compresses, rate-sensitive REITs, and consumer discretionary pinched by real-wage erosion.
- What signals would invalidate the sticky-inflation thesis?
- A clear cooling in services CPI (below 3% YoY for two consecutive quarters), a meaningful drop in shelter inflation, or a wage-growth print that breaks below productivity. The thesis below names the specific FRED series to watch.