Investors should stay overweight on commodities with a focus on energy to hedge against inflation as interest rate cuts will likely to come later than originally forecast, according to JPMorgan. "We are not out of the woods yet on inflation, and the current backdrop of above-trend growth raises the risk that inflation will re-emerge as a problem for both central banks and markets," Marko Kolanovic, JPMorgan's chief market strategist, told clients Tuesday.
"A key unknown is how much this would reverse the easy financial conditions that have helped support growth." Kolanovic advised investors to stay overweight on commodities with a focus on energy as oil prices rally. The crude rally is hitting the global economy at the same time as conflict in the Red Sea disrupts shipping and demand puts upward pressure on prices, he said.
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