‘US price hike is a story of overheating’
European stock indexes fell on Friday and the US 10-year yield held close to 2%, as red-hot US inflation sent investors anticipating tighter monetary policy from the Federal Reserve.
US consumer prices rose 7.5% last month, the biggest annual increase in 40 years, data showed on Thursday. The news fueled speculation that the Fed would raise 50 basis points instead of 25 in March.
Wall Street shares fell after the data and weakness continued in the Asian and European sessions on Friday. Europe’s STOXX 600 was down 0.9%.
“Real inflation is out of control,” said Matteo Comineta, senior economist at the Barings Investment Institute. “It’s a story of overheating, plain and simple,” said Mr. Cominetta.
“You have all these cost-push factors on one hand and then you have accelerating demand affecting this limited supply – it’s very hard to see how inflation in the US can ever slow down,” he said.
,