New York Life Investments CEO says inflation will persist and reveals her top protection play

Inflation will persist and add risk to the market, but one asset class could be a long-term ride, Yie-Hsin Hung, chief executive of New York Life Investment Management, said Wednesday.

“Interest rates and inflation are going to persist at levels above what we saw pre-pandemic, and it’s going to continue to cause volatility in the market,” Hung said at CNBC’s Delivering Alpha investor conference.

Hung’s comments come after Federal Reserve Chair Jerome Powell said this week inflation could last longer than expected as supply bottlenecks and other Covid-related issues continue to push prices upward. The latest consumer price reading in August showed year-over-year inflation at its hottest level in more than a decade.

The asset manager advised investors to shift portfolios toward categories that provide income and inflation protection.

Hung highlighted infrastructure, both listed and private, as her top play to hedge against rising prices.

“As we think about the need for long-term income, this an asset class is quite long in nature and also has inflation characteristics built in,” Hung said.

Hung noted infrastructure should get a boost from Washington with lawmakers poised to pass a $1 trillion stimulus bill.

Northern Trust Asset Management President Shundrawn Thomas, who joined Hung at the Delivering Alpha summit, said he views shaky periods in the market as a potential buying opportunity.

“We continue to be constructive on risk assets,” Thomas said. “We’re not confused about the near-term risk and inflation…We look at that as an opportunity if we see any meaningful sell-off in the current time period.”

The two asset managers spoke on a panel about the future of wealth management moderated by CNBC’s Sara Eisen. Hung and Thomas discussed the increasing importance of digitization, democratization and diversity in the management industry.