As the U.S. economy starts to open up following the country's vaccination program, consumer spending is on the rise.
But this spending, along with supply bottlenecks, is pushing up inflation at the fastest rate in more than a decade.
The consumer price index, which measures inflation, saw its largest on-year jump since September 2008. The index was up by 0.8 percent on-month in April, and was 4.2 percent higher than a year earlier.
Markets were braced for a hot consumer inflation report, but nowhere near 4.2 percent.
Excluding food and energy, core C-P-I rose 0.9 percent in April for the largest monthly increase since 1982.
The U.S. Federal Reserve Vice Chairman said on Wednesday morning that he was surprised by the C-P-I data, but also reiterated that the inflation jump should be transitory. But concerns rise that the Fed might be wrong in its view that the price rises are temporary.
U.S. stocks extended their losses Wednesday, with the Dow Jones Industrial Average and S&P 500 posting their steepest three-day declines since late October. The S&P 500 fell 89.06 points, or 2.1 percent; The Dow Jones Industrial Average retreated 681.50 points, or 2 percent; and The tech-heavy Nasdaq Composite slumped 357.75 points, or 2.7 percent, down 5.2 percent this week.
Lee Eunjin, Arirang News.