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Is Sticky Inflation Here to Stay? ETF Areas to Watch
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Key Takeaways
Sticky services inflation and resilient demand may keep price pressures elevated.
INFL, DBC, SGOV and VTV offer different approaches to inflation protection.
Rising commodity prices may support DBC, while value stocks may benefit from higher rates.
Inflation does not usually hit your wallet all at once. Instead, it gradually eats into your monthly budget. For much of 2026, rising gasoline prices, due to the U.S.-Iran war, have been a major concern.
Inside the Fed Rate Hike
To counter persistent inflationary pressures, the Federal Reserve raised its benchmark interest rate to 3.75%-4% on Sept. 16, marking its first rate hike since 2023. The central bank is scheduled to meet again on Oct. 27-28, as inflation pressures remain in focus. As of now, the Fed is expected to stay put in October but to hike in December, per a Reuters poll.
Is Sticky Inflation Here to Stay?
Now, Vanguard is warning that consumers and investors need to look beyond energy prices. Persistent inflation in services, supported by resilient consumer demand, could make it harder for price pressures to fade, per TheStreet, as quoted on Yahoo Finance.
Energy prices remain part of the problem, but Schickling believes the strength of demand deserves closer attention.
September Inflation Comes in Hotter Than Expected
The latest Consumer Price Index (CPI) report shows that inflation accelerated in September. Consumer prices rose 0.6% on a seasonally adjusted monthly basis (matching economists’ expectation, as quoted on CNBC), following a 0.4% increase in August.
On an annual basis, inflation climbed to 3.7% from 3.4%. That was also above the 3.6% increase economists surveyed by Dow Jones had anticipated, per CNBC.
Underlying price pressures remained firm, too. Core CPI, which excludes food and energy, increased 0.3% for the second consecutive month. Its annual rate rose to 2.6% from 2.4%.
Why Services Inflation Deserves More Attention
Energy prices can move sharply in response to geopolitical developments, but inflation in services can prove more difficult to bring under control. Services excluding energy rose 0.4% in September, accelerating from 0.3% in August, according to BLS data.
September's increase was also the fastest monthly gain for services since April, when prices rose 0.5%. Unlike gasoline prices, which can fall when oil markets stabilize, many service costs tend to adjust more gradually, per the same TheStreet article, as mentioned on Yahoo Finance.
That trend is worth watching. If service-sector inflation continues to stay steady even as energy prices stabilize, the overall inflation picture could remain uncomfortable for longer.
ETF Picks
Against this backdrop, below we highlight a few ETFs to watch if inflation remains elevated for an extended period.
The ETF is an actively managed ETF that seeks long-term growth of capital in real (inflation-adjusted) terms. It seeks to achieve its investment objective by investing primarily in domestic and foreign equity securities of companies that are expected to benefit, either directly or indirectly, from rising prices of real assets.
The fund has added about 14.2% so far this year (as of Oct. 20, 2026), although the fund has underperformed in recent months.
Invesco DB Commodity Index Tracking Fund (DBC - Free Report)
Commodities often benefit from inflation as rising prices for energy, metals and agricultural products directly increase their market value. They can also serve as an inflation hedge, helping investors preserve purchasing power when the cost of goods and services rises.
The fund DBC has gained about 17.7% over the past six months, has tacked on 3% gains over the past month while the fund is up about 50% in the year-to-date frame (as of Oct. 20, 2026).
Rising inflation leads the Fed to hike rates, which is a negative for the entire stock market as debt becomes pricier. Still, rising rates are good for value stocks than the growth ones as the latter’s cash flows come way out in the future. Higher interest rates because rising discount rates reduce the present value of growth stocks’ expected future earnings.
Value stocks tend to perform better in a rising-rate environment because they often generate stronger current cash flows and trade at lower valuations, making their earnings less dependent on distant future growth. The fund has added about 16.4% so far this year while it is up 1.2% over the past month.
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Is Sticky Inflation Here to Stay? ETF Areas to Watch
Key Takeaways
Inflation does not usually hit your wallet all at once. Instead, it gradually eats into your monthly budget. For much of 2026, rising gasoline prices, due to the U.S.-Iran war, have been a major concern.
Inside the Fed Rate Hike
To counter persistent inflationary pressures, the Federal Reserve raised its benchmark interest rate to 3.75%-4% on Sept. 16, marking its first rate hike since 2023. The central bank is scheduled to meet again on Oct. 27-28, as inflation pressures remain in focus. As of now, the Fed is expected to stay put in October but to hike in December, per a Reuters poll.
Is Sticky Inflation Here to Stay?
Now, Vanguard is warning that consumers and investors need to look beyond energy prices. Persistent inflation in services, supported by resilient consumer demand, could make it harder for price pressures to fade, per TheStreet, as quoted on Yahoo Finance.
Energy prices remain part of the problem, but Schickling believes the strength of demand deserves closer attention.
September Inflation Comes in Hotter Than Expected
The latest Consumer Price Index (CPI) report shows that inflation accelerated in September. Consumer prices rose 0.6% on a seasonally adjusted monthly basis (matching economists’ expectation, as quoted on CNBC), following a 0.4% increase in August.
On an annual basis, inflation climbed to 3.7% from 3.4%. That was also above the 3.6% increase economists surveyed by Dow Jones had anticipated, per CNBC.
Underlying price pressures remained firm, too. Core CPI, which excludes food and energy, increased 0.3% for the second consecutive month. Its annual rate rose to 2.6% from 2.4%.
Why Services Inflation Deserves More Attention
Energy prices can move sharply in response to geopolitical developments, but inflation in services can prove more difficult to bring under control. Services excluding energy rose 0.4% in September, accelerating from 0.3% in August, according to BLS data.
September's increase was also the fastest monthly gain for services since April, when prices rose 0.5%. Unlike gasoline prices, which can fall when oil markets stabilize, many service costs tend to adjust more gradually, per the same TheStreet article, as mentioned on Yahoo Finance.
That trend is worth watching. If service-sector inflation continues to stay steady even as energy prices stabilize, the overall inflation picture could remain uncomfortable for longer.
ETF Picks
Against this backdrop, below we highlight a few ETFs to watch if inflation remains elevated for an extended period.
Horizon Kinetics Inflation Beneficiaries ETF (INFL - Free Report)
The ETF is an actively managed ETF that seeks long-term growth of capital in real (inflation-adjusted) terms. It seeks to achieve its investment objective by investing primarily in domestic and foreign equity securities of companies that are expected to benefit, either directly or indirectly, from rising prices of real assets.
The fund has added about 14.2% so far this year (as of Oct. 20, 2026), although the fund has underperformed in recent months.
Invesco DB Commodity Index Tracking Fund (DBC - Free Report)
Commodities often benefit from inflation as rising prices for energy, metals and agricultural products directly increase their market value. They can also serve as an inflation hedge, helping investors preserve purchasing power when the cost of goods and services rises.
The fund DBC has gained about 17.7% over the past six months, has tacked on 3% gains over the past month while the fund is up about 50% in the year-to-date frame (as of Oct. 20, 2026).
iShares 0-3 Month Treasury Bond ETF (SGOV - Free Report)
This kind of ultra-short bond ETF offers liquidity and income. The fund yields 3.64% annually with flat year-to-date return (as of Oct. 20, 2026).
Vanguard Value ETF (VTV - Free Report)
Rising inflation leads the Fed to hike rates, which is a negative for the entire stock market as debt becomes pricier. Still, rising rates are good for value stocks than the growth ones as the latter’s cash flows come way out in the future. Higher interest rates because rising discount rates reduce the present value of growth stocks’ expected future earnings.
Value stocks tend to perform better in a rising-rate environment because they often generate stronger current cash flows and trade at lower valuations, making their earnings less dependent on distant future growth. The fund has added about 16.4% so far this year while it is up 1.2% over the past month.