Eggs may soon be back on my breakfast menu.

Like everything else, eggs have been creeping up in price ever since the pandemic. But it’s been particularly noticeable over the past year.

The invasion of Ukraine caused a spike in feed and fuel prices, making it more expensive to produce and ship eggs.

Then bird flu started spreading around and farmers were forced to slaughter their flocks to control the disease.

According to data from the Bureau of Labor Statistics, the average price of a dozen eggs hit $4.82 in January – that’s more than three times the cost of eggs just two years ago, when you could buy a dozen for $1.47!

Thankfully, a new generation of chickens is starting to produce and the average cost for a dozen eggs has dropped back down to $3.45 in March. That’s still pricey but more reasonable, and prices should keep coming back down as more supply becomes available.

Egg-flation may be an extreme example, but it shows how easily costs can change for businesses and consumers… and those that aren’t prepared will pay the price.

Here at the Intelligent Income Daily, we’re focused on finding the safest income investments on the market. Some of our favorite companies have steadily grown and rewarded shareholders through it all – from stagflation and double-digit interest rates to financial crises and recessions.

Today I want to explain what’s going on with the Fed’s continued interest rates hikes (despite lowering inflation) and its current effect on the economy – plus give you one quick way to invest in companies that are ready to handle whatever could come next.

Accelerating and Braking the Economy
Even though inflation has dropped from 9% last year to 5%, the Fed’s job is not done yet. Ideally, they’d like inflation to stabilize at around 2%.

But it’s a tough balancing act.

Because there is still inflationary pressure coming from around the world – the war in Ukraine is impacting supplies of grain, which increases food prices; the Organization of Petroleum Exporting Countries (OPEC) is cutting oil supplies, which means gasoline prices could rise; tensions with China could upend semiconductors, making it more expensive to get tech products.

Not to mention at home, the federal government is pouring billions of dollars into the economy through the infrastructure bill, CHIPS Act, and Inflation Reduction Act.

On the other hand, if the Fed raises rates too high for too long, they risk kicking the economy into recession.

It’s a bit like driving by stepping on the gas and the brakes at the same time. The Fed cannot move the economy forward out of its current state without fully accelerating interest rate hikes, but it also can’t crash into or break anything at high speed while the brakes are in use.

So right now, the economy is slowly sputtering down the road like a first-time driver.

Case in point, while the Fed and other central banks around the world are trying to get control of inflation, higher interest rates are putting a damper on economic growth by making it more expensive for businesses to borrow money to expand.

I covered this upcoming credit crunch earlier this week.

As a result, many economists think that inflation won’t get back to targeted levels until 2025.

According to the International Monetary Fund, global growth expectations in the short to medium term are around 3%, the lowest forecast since 1990.

That’s a pretty dreary outlook. With economies around the world on shaky ground, its more important than ever to have investments in companies that are ready to face whatever comes next.

Pad Your Portfolio
One way to prepare for an uncertain future is by investing in Dividend Aristocrats. These are companies that have increased their dividend every year for more than 25 years – and many of them have dividend growth streaks of 50 or more years.

That means they’ve experienced and survived just about every economic situation you might think of from pandemics and wars to financial and energy crises. And they’ve faithfully continued to reward shareholders with increasing dividends through it all.

A quick way to add these to your portfolio is through the ProShares S&P 500 Dividend Aristocrats ETF (NOBL).

This ETF invests only in companies that are Dividend Aristocrats. It yields 1.9% and has beaten the S&P 500 by 2.3% over the past year.

Right now, we all need padding in our portfolio in preparation for whenever the Fed finally decides between the accelerator and the brakes.

And we have plenty of padding in our Intelligent Income Investor portfolio.

Two of our recent recommendations have returned nearly 20% since we alerted readers last year.

This premium service provides a model portfolio with our favorite Dividend Aristocrat picks, as well as trade alerts and special reports on the highest quality dividend-paying companies the market has to offer.

Our focus is on finding safe and secure dividends to create a growing income stream that will passively support your lifestyle with stress-free investments.

Happy SWAN (sleep well at night) investing,

Brad Thomas
Editor, Intelligent Income Daily

Source: Wide Moat Research