Inflation worries persist. How should you trade inflation？

Despite decades-high inflation and a deteriorating economic outlook, U.S. retail sales posted the largest increase in eight months in October, showing that consumer demand for goods is largely holding up.

The value of total retail purchases increased by 1.3% last month, according to figures released by the Commerce Department on Wednesday. Retail sales increased by 0.9% if vehicles and petrol were excluded. These numbers don't account for inflation.

The numbers show that consumers are still mostly resilient, and they also imply that the economy started out well in the fourth quarter. This may complicate the argument made by a number of Federal Reserve officials calling for a slower pace of interest-rate increases in the upcoming months. However, policymakers agree that inflation is still far too high.

According to investment management firm Man Group quants, the great inflation trade is anticipated to continue, and all indications point to pricing pressures staying strong for a long while yet. JPMorgan Asset continues to invest in highly rated short-term debt. The chief investment officer of the company has long expressed concern about sticky inflation, which some had thought would decline following the pandemic.

As we all know, amid a high inflation environment, inflation trading is generally taken into consideration. Many investors would switch their portfolios into assets that are typically more advantageous in an inflationary climate when prices are rising.

Typically, wise investors will make an effort to protect their wealth from inflation and maintain its worth. Many investors are recommended to add to or expand their exposure to Treasury inflation-protected securities (TIPS) or I-Bonds as inflation rises. TIPS and Series I-Bonds provide investors with interest payments that rise and fall in line with inflation.