Wall Street Stumbles Over Inflation, Rate Hikes

Stocks are slipping on Wall Street Thursday, Feb. 16, 2023, amid worries that inflation is remaining hotter than feared, Stan Choe, Yuri Kageyama and Matt Ott reported for the Associated Press (AP).

Photo Insert: The worry has been that persistently high inflation will push the Federal Reserve to get even more aggressive on interest rates.

The S&P 500 was 0.6% lower after a report showed inflation at the wholesale level slowed by less last month than economists forecast. It echoed a report on prices at the consumer level from earlier this week that suggested inflation isn’t cooling as quickly and as smoothly as hoped.

The Dow Jones Industrial Average was down 241 points, or 0.7%, at 33,886, as of 11:10 a.m. Eastern time, while the Nasdaq composite was 0.5% lower. They pared earlier losses, with the Dow down 410 points at one point.

Stocks have been churning recently as worries about sticky inflation joust against data suggesting the economy remains more resilient than feared.

The worry has been that persistently high inflation will push the Federal Reserve to get even more aggressive on interest rates. Higher rates can drive down inflation but also drag on investment prices and raise the risk of a serious recession.

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