Feb 14, 2017

Inflation fever hits Wall Street

Consumer prices rose in January by 2.5% year-over-year, the fastest pace in almost five years. But higher prices are also not dissuading consumer spending, as retail sales also rose 0.4% compared with January, well above economists expectations. sharply above economists expectations.

Why it matters: The Federal Reserve has thrown everything but the kitchen sink at the problem of too-low inflation in recent years. Today's data show that its efforts have paid off, and investors are now fleeing the safety of government bonds and putting that money into the stock market. Stocks are near record highs.

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