Federal Reserve officials are hinting at multiple 50 basis points interest rate increases in the coming months to tame the red-hot inflation. However, most investors and analysts believe that the Fed’s tighter monetary policy could push the economy into a recession. JPMorgan Chase CEO Jamie Dimon recently warned investors of an economic hurricane. These macroeconomic headwinds are expected to keep the stock markets volatile in the near term.
The stock market gained slightly last week. But the rally was short-lived as indexes retreated yesterday amid escalating interest-rate-increase fears. Continued selling has driven many quality stocks into bargain territory. So, now could be an opportune time to bet on fundamentally solid stocks that are trading at relatively cheaper valuations. Investors’ interest in value stocks is evident in the iShares Edge MSCI USA Value Factor ETF’s (VLUE) 1.7% returns over the past month.
