Wobble on Wall Street but what are the underlying pressures?

After last week's shares plunge, anxious bankers are watching out for the Fed's interest rate rises and lower corporate profits

Get ready for phase two of Wall Street's wobble. That was the fearful advice when the latest American inflation figures provided evidence that underlying cost of living pressures were surfacing in the world's biggest economy.

The thinking seemed impeccable. When shares were plunging last week the reason was that the markets thought rising inflation would prompt the Federal Reserve - the US central bank - into a series of interest rate rises this year. That assumption was certainly not challenged by figures showing that core inflation in the latest three months has been running at its highest annualised rate in more than six years.

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