We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Softer CPI boosts rate-cut bets, supporting Treasuries like TLT as bond yields edge lower.
Cooling inflation may aid gold prices; GLD stays in focus if rates remain lower for longer.
Low-rate hopes favor growth and income ETFs such as SPYG, VYM, SDIV, KNG and DIV.
U.S. inflation pressures eased further in November, offering a nice surprise to investors. The Consumer Price Index (CPI) rose 2.7% year over year, below the 3.1% increase economists had forecast, according to Bloomberg data, as quoted on Yahoo Finance.
Core Inflation Also Undershoots Estimates
Core CPI, which excludes food and energy, increased 2.6% from a year earlier in November, well under the 3.1% rise economists had expected. In September—the most recent month with full data—both headline and core CPI had risen 3% year over year.
The November report was the first inflation reading released since September, as October’s CPI was not released due to the government shutdown.
Tariffs, Fed Policy and Inflation Outlook
Pantheon Macroeconomics’ chief U.S. economist Samuel Tombs said the CPI data are consistent with core PCE inflation slowing to 2.7% in November, from 2.9% in September, making a rise to 3% by year-end unlikely, as quoted on Yahoo Finance.
Against this backdrop, below we highlight a few exchange-traded fund (ETF) investing strategies that can be gainful for investors.
Bet on Treasuries
Treasuries gained as softer-than-forecast U.S. inflation data led traders to boost bets that the Federal Reserve will cut its benchmark interest-rate at least twice next year, per Bloomberg, as quoted on Yahoo Finance. The Fed projected PCE inflation to end 2025 at 2.9%, down from the 3% forecast in September.
Now the actual data also showing signs of cooling, traders’ confidence may have boosted. Note that Fed projections released last week pointed to just one rate cut in 2026, following three successive 0.25% cuts to close out 2025.
iShares 20+ Year Treasury Bond ETF (TLT - Free Report) rose 0.48% on Dec. 18, 2025 while iShares 0–1 Year Treasury Bond ETF (SHV - Free Report) gained 0.02%.
Long Gold?
Gold market, which is already red-hot this year, may see some strength from cooling inflation, unless there is a solid profit booking in gold and investors rush to the equity markets in anticipation of lower rates. As gold is a non-interest-bearing asset, the yellow metal is expected to outperform if rates remain lower for longer. The largest gold bullion ETF SPDR Gold Trust (GLD - Free Report) should now be closely-tracked.
Growth ETFs to Gain Traction?
Given this beneficial investing backdrop, investors can bet on large-cap growth ETFs. After all, growth investing thrives in a low-rate environment. State Street SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) is an example of the growth ETFs that may gain if inflation continues to stay calm.
Play ETFs That Offer You Higher Current Income
In reflection of the falling inflation data, the benchmark 10-year U.S. treasury yield fell to 4.12% on Dec. 18, 2025 from 4.16% recorded on Dec. 17, 2025. The two-year U.S. treasury yield also slipped to 3.46% on Dec. 18, 2025 from 3.49% recorded on Dec. 17, 2025 during this timeframe. Somber inflation data led to this slump in bond yields.
Against this scenario, ETFs that offer higher current income should be in vogue. These ETFs include Vanguard High Dividend Yield ETF (VYM - Free Report) (yields 2.44% annually),Global X SuperDividend ETF (SDIV - Free Report) (yields 9.61% annually), FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG - Free Report) (yields 8.57% annually), and Global X SuperDividend U.S. ETF (DIV - Free Report) (yields 7.09% annually).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
November Inflation Cools: ETF Strategies to Play
Key Takeaways
U.S. inflation pressures eased further in November, offering a nice surprise to investors. The Consumer Price Index (CPI) rose 2.7% year over year, below the 3.1% increase economists had forecast, according to Bloomberg data, as quoted on Yahoo Finance.
Core Inflation Also Undershoots Estimates
Core CPI, which excludes food and energy, increased 2.6% from a year earlier in November, well under the 3.1% rise economists had expected. In September—the most recent month with full data—both headline and core CPI had risen 3% year over year.
The November report was the first inflation reading released since September, as October’s CPI was not released due to the government shutdown.
Tariffs, Fed Policy and Inflation Outlook
Pantheon Macroeconomics’ chief U.S. economist Samuel Tombs said the CPI data are consistent with core PCE inflation slowing to 2.7% in November, from 2.9% in September, making a rise to 3% by year-end unlikely, as quoted on Yahoo Finance.
Against this backdrop, below we highlight a few exchange-traded fund (ETF) investing strategies that can be gainful for investors.
Bet on Treasuries
Treasuries gained as softer-than-forecast U.S. inflation data led traders to boost bets that the Federal Reserve will cut its benchmark interest-rate at least twice next year, per Bloomberg, as quoted on Yahoo Finance. The Fed projected PCE inflation to end 2025 at 2.9%, down from the 3% forecast in September.
Now the actual data also showing signs of cooling, traders’ confidence may have boosted. Note that Fed projections released last week pointed to just one rate cut in 2026, following three successive 0.25% cuts to close out 2025.
iShares 20+ Year Treasury Bond ETF (TLT - Free Report) rose 0.48% on Dec. 18, 2025 while iShares 0–1 Year Treasury Bond ETF (SHV - Free Report) gained 0.02%.
Long Gold?
Gold market, which is already red-hot this year, may see some strength from cooling inflation, unless there is a solid profit booking in gold and investors rush to the equity markets in anticipation of lower rates. As gold is a non-interest-bearing asset, the yellow metal is expected to outperform if rates remain lower for longer. The largest gold bullion ETF SPDR Gold Trust (GLD - Free Report) should now be closely-tracked.
Growth ETFs to Gain Traction?
Given this beneficial investing backdrop, investors can bet on large-cap growth ETFs. After all, growth investing thrives in a low-rate environment. State Street SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) is an example of the growth ETFs that may gain if inflation continues to stay calm.
Play ETFs That Offer You Higher Current Income
In reflection of the falling inflation data, the benchmark 10-year U.S. treasury yield fell to 4.12% on Dec. 18, 2025 from 4.16% recorded on Dec. 17, 2025. The two-year U.S. treasury yield also slipped to 3.46% on Dec. 18, 2025 from 3.49% recorded on Dec. 17, 2025 during this timeframe. Somber inflation data led to this slump in bond yields.
Against this scenario, ETFs that offer higher current income should be in vogue. These ETFs include Vanguard High Dividend Yield ETF (VYM - Free Report) (yields 2.44% annually),Global X SuperDividend ETF (SDIV - Free Report) (yields 9.61% annually), FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG - Free Report) (yields 8.57% annually), and Global X SuperDividend U.S. ETF (DIV - Free Report) (yields 7.09% annually).