The Consumer Price Index, which measures how quickly prices are going up in the U.S. economy, rose at a faster than anticipated 2.1 percent in January compared to a year ago, triggering fears of another rocky run on Wall Street. The Dow fell over 100 points at the open.
Inflation around 2 percent is still very low, but Wall Street traders fear that this could be the beginning of a quick run up in wages and prices. There’s a big re-assessment going on about what the future holds for the U.S. markets and economy.
While no one is talking about an immediate downturn for the economy, the picture looks a lot murkier heading into 2019, causing investors to question whether stocks should be so high. President Trump’s tax cuts are widely expected to trigger faster growth and more inflation this year, which could backfire if the economy gets too hot.
Source: The Washington Post