Inflation Goes Up and Stocks Go Down

The Consumer Price Index showed that prices were up 8.3% in August compared to 12 months earlier. While prices were rising at a slower rate than they had the previous two months, analysts had expected the rate to be lower, given the recent decline in gas prices.

Several economists had hoped that falling energy prices would curb inflation, but price increases continue to persist on core items that make up most consumer budgets, such as food and housing. The core gauge, which discounts food and fuel prices, climbed by 6.3% in the year through August, compared with 5.9% in July.

Following the Bureau of Labor Statistics releasing the monthly CPI figures, the S&P 500 dropped more than 2% as trading opened on Tuesday, signaling that investors are less confident in the Federal Reserve’s ability to curb inflation and more convinced the U.S. central bank will continue its aggressive path of raising rates.

“With increased confidence that the Federal Reserve will need to remain aggressive into 2023, stocks have sold off, giving active managers an opportunity to add to favored equities at lower levels,” said Todd Rosenbluth, head of research at VettaFi.

With inflation — and market volatility — persisting, active management can help.

As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP C+), the T. Rowe Price Dividend Growth ETF (TDVG B), the T. Rowe Price Equity Income ETF (TEQI B), the T. Rowe Price Growth Stock ETF (TGRW C), and the T. Rowe Price US Equity Research ETF (TSPA B).

T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.

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