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Dow Drops by Over 1,000 Points After New Inflation Report

On Tuesday, the Dow Jones Industrial Average dropped by over 1,000 points after a new government report revealed that inflation rose again in the month of August.

The Daily Caller reports that the Dow saw a 3.5 percent drop in just one day, with every other major stock also declining after the news. The Nasdaq fell by 4.6 percent, and all 11 sectors of the S&P 500 also fell. The drastic drop was caused by a new Consumer Price Index (CPI) report from the Bureau of Labor Statistics (BLS), which indicated that prices rose by about 0.1 percent in the month of August.

Prices increased by 8.3 percent from August of 2021 to August of 2022, which was higher than the 8.1 percent increase that was originally projected. The report concludes that year-over-year inflation is decreasing much more slowly than some experts predicted, meaning the economic toll will continue to be felt by most Americans for months to come. Concerns have also been raised that the Federal Reserve may have to raise interest rates yet again to offset the ongoing inflation crisis.

“Today’s CPI reading is a stark reminder of the long road we have until inflation is back down to earth,” said Mike Loewengart, head of model portfolio construction for Morgan Stanley’s Global Investment Office. “Wishful expectations that we are on a downward trajectory and the Fed will lay off the gas may have been a bit premature.”

“Right now, it’s not the journey that’s a worry so much as the destination,” said Brian Jacobsen, senior investment strategist at Allspring Global investments. “If the Fed wants to hike and hold, the big question is at what level.”

The ongoing inflation crisis was caused by a number of factors, including dramatically increased government spending since Joe Biden took office, ostensibly for the purpose of combatting the effects of the COVID-19 pandemic. However, such spending bills as his first coronavirus stimulus bill, the infrastructure bill, and the so-called “Inflation Reduction Act” have only increased inflation due to reducing the value of the American dollar.

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About Eric Lendrum

Eric Lendrum graduated from the University of California, Santa Barbara, where he was the Secretary of the College Republicans and the founding chairman of the school’s Young Americans for Freedom chapter. He has interned for Young America’s Foundation, the Heritage Foundation, and the White House, and has worked for numerous campaigns including the 2018 re-election of Congressman Devin Nunes (CA-22). He is currently a co-host of The Right Take podcast.

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