Analysts have raised their outlooks for a recession as the Russian invasion of Ukraine, and related events are threatening to create upward pressure on inflation and weigh on economic activity. The probability of a recession in the U.S. was raised to 33% in the next 12 months, up ten percentage points from the last month’s survey. On the other hand, the Federal Reserve on Wednesday approved its first interest rate increase of 25 basis points to combat the rising inflation. However, officials also raised their inflation outlook.
In times of uncertainty and heightened market volatility, consumer defensive stocks tend to be investors’ favorite to hedge their portfolios. Consumer staples stocks could be good bets considering the near-inelastic demand for their companies’ products. So, during economic downturns, consumers usually tend to focus their spending more on these goods.
