Gauging inflation
Insight and analysis during soaring costs and rising rates
Federated Hermes investment teams offer their views on the latest developments in markets and macroeconomics
Ten asset classes that performed well during inflationary periods
Federated Hermes analyzed the betas to the U.S. Consumer Price Index (CPI), displayed here by major asset class and sector indexes since 2001. The indexes are ranked by positive price changes relative to changes in the CPI.
For illustrative purposes only and not representative of any specific investment.
Past performance is no guarantee of future results.
Inflation beta is a measure of the responsiveness of an asset class’s (represented here by the indicated indexes) returns to changes in inflation. Instead of calculating the risk of a stock to the overall market, this beta calculation reflects the risk of the asset class to CPI. For example, beta of 1.1 would indicate that if there were a 1% change in the CPI, the index would change 1.1% (or 10% better in times of inflation and 10% worse in times of deflation). Higher betas indicate higher risk to CPI, and potentially a better hedge in times of inflation. The beta is calculated using the year-over-year changes of both the seasonally adjusted CPI and each representative asset class index. The underlying data utilized for this analysis ranges from 1/31/01 to 4/12/22 (YOY returns from 1/31/02 to 4/12/22).
For additional information, including definitions of related terms and indexes, see the Financial Glossary and Benchmark Index Glossary.
