Inflation remains high, and that was on the mind of Jerome Powell as the Federal Reserve chair gave testimony to the Senate Banking committee today. Powell made it clear that the central bank is likely to lift interest rates higher than previously anticipated. Currently, the Fed’s key funds rate is set in the range of 4.5% to 4.75%.
“Although inflation has been moderating in recent months, the process of getting inflation back to 2% has a long way to go, and is likely to be bumpy… The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said.
His comments have reignited worries that the Fed will trigger a recession to kill inflation. In bond markets, the 2-year note yield rose to near 5%, well above the 10-year note’s 3.9%, an expansion of the yield inversion usually seen as a recession indicator.
While the Fed’s policy of tighter money and higher rates is squeezing capital and threatening deeper economic pain, and equities generally are edging down in response, this doesn’t mean that investors can’t find upbeat stock prospects. Plenty of stocks are set to gain as interest rates go up – and Wall Street’s analysts have been helping us find them.
We’ve used the TipRanks database to pull up details on two of those picks, stocks ready to capitalize on higher interest rates. Let’s take a closer look.
BGC Partners (BGCP)
BGC Partners is a small-cap financial services company, based in New York City and formed in 2004 when its parent company Cantor Fitzgerald spun off its brokerage business. BGC has been an independent entity since then, and currently offers clients a range of broker services and trade execution, with voice, electronic, or hybrid brokerage options. The company’s products include fixed income securities, interest rate swaps, equities and related products, credit derivatives, commodities, and futures.
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In recent comments, looking at current economic and market conditions, the company’s Chair and…
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