Investor’s are jittery ….
Why?
Because things ain’t what has been selling in the media about a ‘Good Economy’….
Consumer prices have NOT dropped…..
Inflation IS NOT abating due to ole’ Jerome’s interst rate hikes…..
Even after stripping out food and fuel prices, both of which jump around a lot, the price index climbed by 4.7 percent in the year through last month — also a pickup, and more than expected in a Bloomberg survey of economists.
Those inflation readings are well above the Fed’s goal of 2 percent annual price increases. And the report’s details offered other reasons to worry. The previously-reported slowdown in December inflation figures, which had given economists hope, looked less pronounced after revisions. While price increases had been consistently slowing on a monthly basis, they are now showing signs of speeding back up.
Stocks slumped to their worst week of the year, with the S&P 500 down by around 1.5 percent on Friday morning, as investors digested the report and what it portends for the Fed, which has been raising rates aggressively since last year. Financial markets have come under sustained pressure in recent weeks as investors have recalibrated their expectations for how long inflation could remain high, and how high interest rates could go as a result.
The inflation figures are just the latest evidence that neither price increases nor the broader economy are cooling as much as expected. Hiring has remained abnormally robust and figures Friday showed that people continue to spend money rapidly on goods and services. Given that, Fed officials may come to believe that they need to do more to cool the economy — in particular, raise interest rates higher than the 5 to 5.25 percent range they had previously expected…..