Despite continually high inflation and the subsequent rate rises raising fears about a recession, inelasticity means that the demand for food stays steady. Food stocks are often excellent defensive investments. Therefore, it could be a good option for investors to invest in their favorite quality food stocks, The Hershey Company (HSY), Kellogg Company (K), and Campbell Soup Company (CPB), to reap significant returns.
Federal Reserve Chair Jerome Powell has reiterated to the market many times that the central bank will keep interest rates elevated until inflation is under control, even if an economic downturn occurs. According to the Bloomberg recession probability forecast, 65% of participants forecasted the probability of a U.S. recession within the next year. As of now, the annualized Personal Consumption Expenditure (PCE) of 5%, although lower than in January, is still far too high relative to the Fed’s stated 2% target.
