More Market Turmoil? Inflation Higher Than Expected

Investors may not be happy because it could lead to a hike in interest rates
By Newser Editors,  Newser Staff
Posted Feb 14, 2018 8:55 AM CST
More Market Turmoil? Inflation Higher Than Expected
Stacks of $100 bills make their way down the line at the Bureau of Engraving and Printing facility in Fort Worth, Texas.   (AP Photo/LM Otero, File)

Given the markets' recent volatility, investors were keeping a closer eye than usual on Wednesday's new inflation report—and they may not be thrilled with the data. The consumer price index showed that prices for everyday goods rose slightly higher than expected in January, reports the Wall Street Journal. That could translate into a bumpy day on Wall Street because higher inflation is likely to increase pressure on the Fed to raise interest rates faster than expected, notes the AP. The Dow was down about 100 points in the first minutes after Wednesday's open.

"Given the recent roller coaster ride in equities was sparked in good part by inflation fears accelerating rate hikes, the latest inflation data will be seen as increasingly important and telling, to date," the chief economist at Stifel Economics wrote to clients ahead of the report. The overall CPI rose 0.5% in January, the most in four months, while core prices—which excludes the food and energy sectors because they're so volatile—rose 0.3%. Economists expected rises of 0.4% and 0.2%. The next Fed meeting is in March. (More inflation stories.)

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