2 of the Best Growth Stocks to Buy if Inflation Has Peaked

The stock market is having a rough year, as inflation recently hit a 40-year high, forcing the U.S. Federal Reserve to increase interest rates rapidly. But the core measure of inflation, the Consumer Price Index (CPI), is a lagging indicator and might not be the best representation of the real-time environment.

Since March, the prices of key commodities have collapsed from their multi-year highs. Wheat is down 36%, and natural gas has fallen 42%. Both are key inputs in food and energy production, which heavily influence CPI data. In addition, five-year inflation expectations are close to their 2022 lows, implying that high inflation is perceived as a relatively short-term phenomenon.

But it could take months for commodity price drops to feed through to consumers because producers need to work through existing inventory -- which was significantly more expensive a few short months ago. Therefore, it's possible that inflation has already peaked, even though it might not show up in the CPI data until later this year.

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Source Fool.com