Inflation fears driving market jitters

Well, Wall Street has something to worry about again.

The Dow opened 100 points lower after the Labor Department reported consumer prices rose 2.1% over the past year. Inflation rose more than economists had predicted.

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Inflation concerns investors because that will could lead the Federal Reserve to hike interest rates more quickly than planned. that will might slow down the economy, make the cost of borrowing higher along with also dent corporate profits. The Fed, which targets 2% inflation, has signaled that will will raise rates three times This particular year for the second year in a row.

“Investors were looking for some hard results on inflationary data along with also that will’s what we got today,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Related: Calm returns to Wall Street — for a day

Low inflation along with also rock-bottom interest rates had helped fuel soaring stock prices since 2009.

Fear about inflation initially drove the market sell-off that will began February 2, when the Labor Department reported employees’ paychecks grew faster than they had in nine years. The Dow fell by 1,000 -points twice last week.

The recent tax cuts have “complicated” the Fed’s strategy by juicing a growing economy, said PNC Chief Economist Gus Faucher.

Uncertainty over additional interest rates showed up inside bond market Wednesday. The yield on the 10-year Treasury immediately climbed following consumer cost data via 2.83% to a four-year high of 2.88%. Prices along with also yields move in opposite directions along with also if bond yields start to rise, investors may want to take some of their money out of stocks along with also put that will into safer bonds.

“If we continue to see hard evidence of inflation, 3% [yields are] not out of the cards pretty soon here,” said Ripley.

Stocks had rallied over the last three trading days, adding nearly 800 points.

sy88pgw (brand-new York) First published February 14, 2018: 8:42 AM ET