Key indicators for the Federal Reserve to gauge inflation increased more than expected in January, signalling that Jerome Powell and policy makers have more work to do to bring down prices, which could mean a longer rate-hike cycle.
According to the data released by the Commerce Department on Friday, the personal consumption expenditures price index excluding food and energy rose 0.6% in January, and increased 4.7% from the same period of last year. That was higher than Wall Street’s expectations for 0.5% for the month and 4.4% from a year ago.
When including the volatile food and energy segment, headline inflation rose 0.6% and 5.4%, respectively.
Dow Jones fell more than 480 points or 1.46% to 32,670.55 points. Meanwhile, S&P 500 dropped 1.64% and tech-heavy Nasdaq Composite plunged 2.11%.