PFIX - Higher inflation data has this interest rate sensitive ETF rising
Following a hotter than anticipated Consumer Price Index report, the Simplify Interest Rate Hedge ETF ( NYSEARCA: PFIX ), which is geared to hedge against higher interest rates has seen an upward push.
PFIX has tracked into the green by 1.2% , and has outshined the broader markets with the Nasdaq, S&P 500, and Dow Jones based ETFs sinking in response to the latest inflation figures.
The Invesco QQQ ETF ( QQQ ), SPDR S&P 500 ETF Trust ( NYSEARCA: SPY ), iShares Core S&P 500 ETF ( IVV ), Vanguard S&P 500 ETF ( VOO ), and the SPDR Dow Jones Industrial Average ETF ( DIA ) are all down 3% , 2.2% , 2.2% , 2.2% , and 1.8% , respectively.
PFIX has drawn some attention as rising rates continues to be the theme looking forward. The ETF seeks to hedge against interest rate movements by holding a large position in over-the-counter interest rate options that are intended to offer exposure to large upward moves in interest rates and interest rate volatility.
The latest CPI print has increased the idea of a full 1% rate hike by the Fed next week. Fed Fund Futures are now pricing in a 20% chance of a 100-basis point Fed hike and an 80% chance of a 75-basis point rate hike.
CPI itself climbed 8.3% Y/Y in August and Core CPI rose to 6.3% Y/Y, both indicating further Fed tightening.
For further details see:
Higher inflation data has this interest rate sensitive ETF rising