Inflation Could Hit 4.2% This Year: 3 Stocks to Buy Now to Protect Your Portfolio
Key Points
ExxonMobil's integrated model enables the company to profit in multiple ways when oil and gas prices rise.
Freeport-McMoRan is a top producer of copper, which is an especially good inflation hedge.
Berkshire Hathaway's diversification and the pricing power of its businesses make it an inflation-resistant stock.
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Inflation could soar more than the Federal Reserve is admitting. That's the conclusion of the Organization for Economic Cooperation and Development (OECD) in its April 2026 report. While the Fed projects U.S. inflation this year at 2.7%, the OECD expects it to reach 4.2% due to the Iran war and the Trump administration's tariffs.
This isn't good news for most stocks. Higher inflation can cause customers to spend less, leading businesses to generate lower revenue and earnings. However, some stocks are practically inflation-proof investments. Here are three stocks to buy now to protect your portfolio.
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1. ExxonMobil
Higher oil and gas prices are a key driver of inflation. Unsurprisingly, oil stocks tend to hold up well during periods of high inflation. ExxonMobil (NYSE: XOM) is the largest U.S. oil and gas company and the second-largest in the world, trailing only Saudi Aramco.
ExxonMobil's operations include upstream (production), downstream (refining), and chemicals. This integrated model enables the company to profit in multiple ways when oil and gas prices rise. It's no coincidence that this top oil and gas stock has been a big winner so far in 2026.
However, ExxonMobil doesn't need a geopolitical crisis to succeed. The company projects that its total addressable market will more than double to around $8 trillion by 2050, thanks in part to expanding into new businesses.
ExxonMobil also pays an attractive dividend, which currently yields 2.5%. The energy giant has paid dividends for more than 100 years. He has increased its payout for 43 consecutive years with a compound annual growth rate of roughly 6% -- well above the inflation rate during the period.
2. Freeport-McMoRan
Commodity prices usually rise along with inflation, especially those with strong demand. Copper is an especially good inflation hedge. And Freeport-McMoRan (NYSE: FCX) ranks among the world's largest publicly traded copper producers.
Even if inflation weren't a concern, copper prices are likely to increase. A study led by S&P Global (NYSE: SPGI) Vice Chairman Dan Yergin concluded that copper demand will increase 50% by 2040 due to an "accelerating pace of electrification."
The ongoing build-out of data centers to host AI applications is an important driver of higher copper demand, but it's not the only one. Defense and energy transition are also other key factors behind the growth.
Gold is also viewed as one of the best commodities for hedging against inflation. While Freeport-McMoRan is one of the top copper stocks, it's also a significant gold producer. The company produced 1.1 million ounces of gold last year and expects to produce around 3.3 million ounces through 2028.
3. Berkshire Hathaway
Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) may not be as obvious an inflation-resistant stock as ExxonMobil and Freeport-McMoRan. However, the conglomerate is a good pick for investors during periods of high inflation due to its diversification and pricing power.
Several of Berkshire's subsidiaries typically perform well when inflation rises. For example, Berkshire Hathaway Energy owns utilities that can pass along higher costs to customers. So can Berkshire-owned BNSF Railroad as well as its insurance businesses, which include Berkshire Hathaway Specialty Insurance, GEICO, and General Re.
Some of the conglomerate's top equity holdings also have strong pricing power. The list includes American Express (NYSE: AXP), Coca-Cola (NYSE: KO), Chevron (NYSE: CVX), Occidental Petroleum (NYSE: OXY), and Chubb (NYSE: CB), which combined make up more than 41% of Berkshire's total portfolio.
Don't forget Berkshire Hathaway's massive cash stockpile either. As of the end of 2025, the company's cash, cash equivalents, and short-term investments totaled more than $373 billion. Higher inflation could prompt the Federal Reserve to raise interest rates, boosting Berkshire's interest income.
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American Express is an advertising partner of Motley Fool Money. Keith Speights has positions in Berkshire Hathaway, Chevron, and ExxonMobil. The Motley Fool has positions in and recommends Berkshire Hathaway, Chevron, and S&P Global. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
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