Hot inflation fuels case for ‘big-bang’ Fed rate hike in March

Steep hike: Customers shop at the Shell Lumber and Hardware home improvement store in Miami. Consumer prices in the United States jumped 7.5% last month compared with 12 months earlier, the steepest year-over-year increase since February 1982. -- AFP

PRESSURE increased on the Federal Reserve (Fed) on Thursday to take a stronger stand against inflation after an unexpectedly large jump in the United States consumer prices defied hopes that the pocketbook squeeze would ease and bolstered the view that the US central bank is behind the curve.

In the hours after a government report showed consumer prices rose at their fastest pace since the early 1980s, traders piled into previously improbable bets that the Fed will start its coming round of rate hikes with a “big bang” 50 basis-point rate hike.