The following is an excerpt from Chuck Mikolajczak, Lucia Mutikani | February 13, 2018 | reuters.com |
(Reuters) - U.S. financial markets have been roiled recently by something neither the economy nor investors have had to contend with for the better part of a decade: concerns they may soon have to reckon with rising inflation.
The S&P 500 .SPX.INX is down more than 7 percent from its lifetime high hit on Jan. 26, after falling as much as 10.2 percent, and yields on the benchmark U.S. 10-year note US10YT=RR have climbed to a four-year high, largely due to worries over inflation.
What exactly is inflation, aside from a rise in prices for goods and services, and why is it having such a strong effect on markets?
Inflation is measured in a number of ways by various government agencies, and as long as the economy continues to expand it will be a consideration for markets.
Investors will get the latest inflation data on Wednesday with January’s Consumer Price Index and on Thursday with the monthly Producer Price Index.
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