May 11, 2022, 10:07am
The stock market rallied on Wednesday even after consumer prices came in higher than expected, and although experts think inflation may have peaked, the Federal Reserve may still need to raise rates more aggressively as it will take quite some time to return to normal levels.
Consumer prices fell for the first time in eight months.
The S&P 500 and the tech-laden Nasdaq were both up, but the Dow Jones Industrial Average was down.
According to new data released by the Labor Department, inflation came in higher than expected, with prices surging 8.3% on a yearly basis in April.
The rate of inflation in April slowed for the first time in eight months, falling from 8.5% in March, as food, shelter, airline and vehicle prices all surged, but gas prices fell.
Some experts now think that inflation has peaked, though there is still a lot of uncertainty about how long it will take for prices to return to normal.
The yield on the benchmark ten-year Treasury note jumped back above 3% on Wednesday, with some investors worried about higher inflation leading to a slowdown in economic growth.
Tech stocks were hard-hit, weighing on markets yet again as investors continued to sell shares in early trading: The likes of Apple, Amazon, andTesla all fell by nearly 1% or more before paring back losses.
Bill Adams, chief economist for Comerica Bank, says that the peak in inflation is likely behind us.
The new inflation data spooked some investors, who continued to dump riskier assets like cryptocurrencies.
The Fed is going to need to raise rates more quickly and at a higher level than people thought.
Inflation was worse than expected in April. (Forbes)
The stock selloff continues as the Fed continues.
The stock market has fallen for the fifth straight week.
The stock market took a big hit as the post-Fed rally faded.
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