By Amruta Khandekar and Devik Jain
(Reuters)—U.S. stocks were set to open sharply lower on Wednesday as consumer prices rose more than expected in April, fuelling concerns about aggressive monetary policy tightening.
The Labor Department’s report showed consumer price index rose 0.3% last month, the smallest gain since August, but still above economists’ forecast of a 0.2% rise.
The monthly rise in inflation was much smaller compared to the 1.2% surge in March, the largest increase since September 2005, but traders raised their bets that the Federal Reserve will hike rate by a bigger 75 basis points (bps) in June.
Money market futures are now pricing in an 81% chance of a 75 bps hike next month. [IRPR]
“A bit of an upside surprise on all counts, so the peak inflation story will definitely have to be kind of reconsidered in light of this data,” said Ross Mayfield, chief investment
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