Funds designed to give investors an easy way to trade in and out of U.S. corporate debt plunged on Monday, as inflation fears gripped financial markets.
Selling initially took hold Friday, after the May consumer-price index showed little hope of high U.S. costs of living easing. Rents, gas and food prices all pushed higher, dashing hopes by many investors, households and even the White House that efforts to cool inflation from a 40-year high already might be helping.
But in the past few months, “you can see cracks appearing,” Gaske said, including as business profits adjust to workers with paychecks stretched from higher costs for gas, groceries and more. That’s now being reversed as household stimulus checks vanish and prices for nearly everything soar, which has started to pressure quarterly corporate earnings.