Trader Steven Kaplan works on the floor of the New York Stock Exchange, Friday, Oct. 26, 2018. (AP Photo/Richard Drew)
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U.S. quarterly earnings reports this month were supposed to give investors clarity about the health of Wall Street's rally this year.The unexplained absence of inflation during the last decade's U.S. equity price boom is now being replaced in investor psychology by fears that inflation is finally pushing up costs and squeezing margins and may be one of the culprits in this month's selloff of U.S. stocks.U.S. consumer price inflation was 2.3 percent in the year to September, according to the Labor Department, and even "core" inflation, which strips out volatile food and energy prices, is running at 2.2 percent for the year, above the Fed's target.Borrowing costs are also rising as the Federal Reserve is expected to keep raising interest rates into 2019 to ward off the inflationary threat, with U.S. economy growing at 4.2 percent in the second quarter this year, helped by last year's $1.5 trillion worth of tax cuts.Investors are rewarding companies that can keep up with inflation and punishing those that cannot.The company hopes to offset those at least some of those increases by raising prices.Inflation has helped other companies.
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