Stocks erase early gains as inflation concerns persist on Wall Street

Investors face a pervasive list of concerns centering around rising inflation squeezing businesses and consumers.that have been at the root of rising inflation were made worse over the last several months by increased restrictions in China related to COVID-19.

Businesses have been raising prices on everything from food to clothing. Russia’s invasion of Ukraine in February put even more pressure on consumers by raising energy prices and pumping gasoline prices to record highs. Consumers were already shifting spending from goods to services as the economy recovered from the pandemic’s impact, but the intensified pressure from inflation has prompted a sharper shift from discretionary items like electronics to necessities.Stubborn inflation pressures have driven a stark shift in policy from central banks, which are raising rates to try and temper inflation after years of holding rates down to help economic growth.

Now, they are trying to slow economic growth, but investors are worried that they could go too far and actually push the economy into a recession as key economic indicators are already showing a slowdown in things like retail sales.

'Phantom inflation fears' per paulkrugman

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