Dow heads for biggest one-day drop in 3 years(Inflation fears)

[RedEarth]

"The market all year long has been pricing in overly optimistic views on inflation and what the Fed was going to be doing," said Ed Peters, chief investment officer at Pan Agora, explaining the severity of the pullback.

Peters said the latest consumer price report indicates clearly that "not only is the economy is accelerating but inflation is picking up."

The consumer price index rose 0.6%. Excluding food and energy prices, consumer prices rose 0.3%. The increase in the CPI and the core rate were both slightly higher than forecast. Economists expected a 0.5% gain in the CPI, according to a MarketWatch survey. The core CPI was expected to rise 0.2%.

More important, core inflation is now at the top end of the Fed's comfort zone. The central bank has raised short-term interest rates 16 times in a row over the past two years in a bid to choke off inflationary pressures in the economy.

But investor hopes rose in April that the Fed may pause in its cycle of rate hikes after Chairman Ben Bernanke said, in congressional testimony, that the central bank might consider a temporary halt to allow previous rate increases to feed through into the economy, and to assess whether they were having the desired effect of slowing growth.
After the inflation data, the federal-funds-futures market priced in a more than 50% chance of a rate increase in June, up from a 36% chance before the data were released.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B17D1B7BC%2D52A1%2D4EF8%2D9215%2D7BAECAB2C98F%7D&siteid=myyahoo&dist=&print=true&dist=printTop

[Skink]

1. What the hell put the Social Security trust fund in to prop it up.

[TomClash]

2. Inflation?

With rising oil prices? What a shock!

[AlCzervik]

5. This is pretty funny, my Step mother calls me and tells me that

my Dad keeps saying there is no inflation or very little, so they finish their meal and he gets the check and says---"Geez, this is like $10 higher than it was last year for the same meal" and of course his wife says--"But honey, you said there was no inflation"

[izzie]

3. The news is to depressing today I am going to watch old movies

I am a firm one for going to something nice if every thing goes to pot. By by

[sofa king]

4. Yep, that ol' economy is roaring.

It's roaring just like an old First World War biplane: it's roaring up, it's roaring down, it's roaring all over the place, and no matter what else happens, it's gonna hit dirt sooner rather than later.