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    Fed Tougher on Inflation Raises Value Stocks’ Appeal for Some Wall Street Investors

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    The difference between growth stocks and their value-focused counterparts, which include companies such as banks, finance and energy firms (Image: Pixabay)

    Some investors are bracing for a “hawkish” turn (harder on the inflation) by the Federal Reserve (Fed, US central bank), buying actions from Business cyclical and economically sensitive factors they gravitated towards earlier this year, as expectations rise that the central bank is focusing on fighting inflation.

    The gap between growth stocks and their value-focused counterparts, which include companies such as banks, financials and energy firms, has fluctuated over the year, in part because of bets on how quickly the Fed will normalize monetary policy.

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    In recent days, signs that the central bank will move faster than expected as rising consumer prices have shaken stocks in growth and technology companies, which have also been affected by broader market volatility stemming from concerns about the spread of the variant Omicron do coronavirus.

    At the same time, some investors have strengthened bets on so-called value stocks, hoping they will perform better in a tight monetary policy environment.

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    These actions soared in early 2021, with the reopening of the economy of the USA, but faltered after investors gravitated towards technology.

    Among the data the Fed will look at next week are the consumer price index and core inflation, due for release next Friday.

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    Source From: Moneytimes

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