U.S. stocks slumped on Wednesday and benchmark Treasury yields jumped after data showed consumer prices unexpectedly rose by the most in nearly 12 years in April, prompting bets on earlier interest rate hikes. Moments after data showed the U.S. consumer price index jumped 0.8% last month, outpacing a 0.2% forecast, the dollar spiked, and by midday had further extended its gains as expectations of rising real interest rates lifted the currency. The gyrations in financial markets underscored concerns among some investors that the Federal Reserve could be wrong in its prediction that inflation pressures in the United States are “transitory”, and that the central bank may have to raise rates sooner than it currently expects.
