7 Assets to Hedge Against US Inflation Fears
The US is bracing for hotter inflation, but there are assets that can help investors hedge against rising prices. Strategists at Societe Generale (SocGen) have identified seven investments they believe will perform well in an inflationary environment.
The bank's macro fundamentals continue to support inflation persistence, driven by factors such as a second wave of US tariffs, accelerating AI and infrastructure capex cycle, renewed oil-price volatility, and persistently large fiscal deficits across developed economies. As a result, SocGen is recommending investors consider these seven assets:
Treasury Inflation-Protected Securities (TIPS) are the bank's preferred direct inflation hedge. With realised inflation still above market pricing and SG Economics expecting core PCE to remain above 3% in 2026, TIPS offer a steady return for investors in inflationary environments.
The iShares TIPS Bond ETF is down 2% for the year due to rising real yields. European linkers, another term for inflation-linked government bonds, are also considered a compelling opportunity for investors to gain inflation protection in their portfolios.
Copper has been dubbed the 'real-economy inflation hedge' by SocGen strategists, who believe its strong structural demand and constrained supply will support a long-term outlook. The metal is up 14% from levels at the start of the year.