With the resolution of the debt-ceiling crisis and an appreciable moderation of inflation from its decades-high levels around this time last year, an exuberant market was optimistic about a much-coveted “soft-landing” and seemed to have priced in a pause in interest rate hikes by the Federal Reserve.
While the labor market has remained persistently tight amid an economic resilience that has largely exceeded expectations, signs of softness have begun to emerge as increased borrowing costs have kept the demand in check and hurt supplies by making growth more expensive to finance.
With the latest data also suggesting that central-bank rate hikes are causing a global economic cooldown, investors are understandably spooked and seeking safety in fixed-income instruments and precious metals.
In the above context, these four ETFs could gain from market instability and rising rates.
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