Bank of America expects a pick up in inflation next year, and it says a group of stocks that do well with inflation have already been outperforming those that don't.
On Wednesday, Federal Reserve Chairman Jerome Powell said the central bank will try to get inflation higher, but it will take some effort.
"I think you have to be honest with yourself about inflation these days. There are significant disinflationary pressures around the world. And there have been for a while," he said. "It's not going to be easy to have inflation move up. ... It's going to take some time. It took a long time to get inflation back to 2% in the last crisis."
Since September, the pro-inflation stocks have outperformed those anti-inflation stocks by 13 percentage points as investors anticipate higher prices because of the Fed's actions and the stimulus enacted by Congress. Investors just don't want too much inflation. In a report by Bank of America strategists and economists, they note that a low single digit inflation environment is "Goldilocks" for stocks.