Stocks dropped on Monday amid persistent worries about rising interest rates and slower economic growth after the latest warnings on inflation from Federal Reserve officials...
The Dow Jones industrial average closed down 99.34 points, or 0.91 percent, at 10,792.58. The Standard & Poor's 500 Index was down 15.90 points, or 1.27 percent, at 1,236.40. The Nasdaq Composite Index was down 43.74 points, or 2.05 percent, at 2,091.32...
Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, said a sustained rise in core consumer prices would exceed her comfort level.
Federal Reserve Board Governor Susan Schmidt Bies said the Fed is very data-dependent now, and that the economy is at a turning point which makes it difficult to know when the Fed will stop raising interest rates after two years of increases.
And prices are rising in the UK too -- house prices as well as producer prices.
British factory gate inflation picked up more than expected in May to its fastest rate in eight months as the cost of petrol hit a record high, official statistics showed on Monday.
The Office for National Statistics said that output prices rose 0.3 percent on the month in May, taking the annual rate up to 3.0 percent from 2.5 percent. Analysts had predicted 2.8 percent.
Maybe that is why Bank of England Governor Mervyn King says that "global interest rates may have been too low for too long".
"During the fastest three-year period of world economic growth for a generation, monetary policy around the world may have simply been too accommodative," said King in a speech to business leaders in Edinburgh. "Even though the monetary stimulus around the world is now being withdrawn, its effects are still being felt."