Rising inflation and stronger economic growth could push the Federal Reserve to raise interest rates at a faster pace than expected. Fred Katayama reports.
Americans are paying more for gas and rent. The Labor Department says consumer prices rose more than 2 percent last year. And December's 0.3 percent rise was the largest year-on-year increase in 2-1/2 years. What's more, industrial production posted its biggest increase in December in two years. The combo of stronger economic growth and rising inflation could push the Federal Reserve to raise interest rates at a faster pace than expected. And that could further fuel a rise in the dollar, which rallied today on the inflation data. Brown Brothers Harriman global head of currency strategy Marc Chandler: SOUNDBITE: MARC CHANDLER, GLOBAL HEAD OF CURRENCY STRATEGY, BROWN BROTHERS HARRIMAN, (ENGLISH) SAYING: "Overall, I think that the dollar's going to be rising this year primarily because the U.S. is raising interest rates and the rest of the world is still cutting interest rates." 10:40:10 In addition to gas and rent, prices also rose for healthcare, car insurance and used cars and trucks. Food prices were flat, and clothing prices fell for a second straight month.