Dow sinks over 800 points after red-hot May inflation data

NEW YORK: Stocks on Wall Street fell sharply on Friday after getting hammered by data showing inflation is getting worse, not better, as investors had been hoping.

Wall Street came into Friday hoping a highly anticipated report on the consumer price index would show the worst inflation in generations slowed a touch last month.

Instead, the US government said inflation accelerated to 8.6 per cent in May from 8.3 per cent a month before

The Federal Reserve has already begun raising interest rates and making other moves in order to slow the economy, in hopes of forcing down inflation.

Wall Street took Friday's reading to mean the Fed's foot will remain firmly on the brakes for the economy, dashing hopes that it may ease up later this year.

The growing expectation in markets is for the Fed to raise its key short-term interest rate by half a percentage point at each of its next three meetings, beginning next week.

That third one in September had been up for debate among investors in recent weeks. Only once since 2000 has the Fed raised rates by that much, last month.