NEW YORK, New York – A sudden jump in the Consumer Price Index in the United States has undermined U.S. stocks and bonds, while boosting the U.S. dollar Wednesday.

The monthly 0.09 percent CPI rise announced by the Labor Department Wednesday, was well above the expected 0.06 percent. It brought the annualized CPI increase to 6.2 percent, the highest reading in thirty-one years,

“Wednesday’s Consumer Price Index showed another month of inflation data well above the Federal Reserve’s inflation target, primarily due to continued supply chain issues and labor shortages. If inflation doesn’t subside, the Federal Reserve may need to taper at a more substantial rate and hike interest rates, which could hurt stocks and bonds,” Nancy Davis, founder of Quadratic Capital Management, told CNBC Wednesday.

“What do these numbers say? Simply that inflation is going to be long-lasting and structural inflation has picked up speed,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York told Reuters Wednesday.

“Inflation will peak probably in the beginning of the second quarter, and over the next several months the Fed will have to change its tune a little bit and accelerate the pace of tapering,” Cardillo added.

The Nasdaq Composite worse the brunt of the selling in percentage terms. The Nasdaq Composite dived 263.84 points or 1.66 percent to 25,622.71.

The Dow Jones industrials shed 240.04 points or 0.66 percent to 36,079.94.

The Standard and Poor’s 500 let go 38.54 points or 0.82 percent to 4,646.71.

Higher Treasury yields followed the CPI announcement sending the prices of bonds plummeting, while the U.S. dollar surged.

Approaching the New York close Wednesday the euro had tumbled to 1.1478. The British pound lost more than a cent to 1.3408. The Japanese yen fell sharply to 113.91. The Swiss franc weakened to .9284.

The Canadian dollar fell to 1.2495. The Australian and New Zealand dollars were sold off to 0.7326 and 0.7058 respectively.

In London, the FTSE 100 advanced 0.91 percent. The Dax in Germany was down 0.17 percent. The Paris-based CAC 40 dropped 0.03 percent.

On Asian markets, in Japan, the Nikkei 225 slumped 178.68 points or 0.61 percent to close at 29,106.78.

The Australian All Ordinaries fell 18.90 points or 0.24 percent to 7,737.40.

The Hang Seng in Hong Kong went against the trend, gaining 183.01 points or 0.74 percent to close at 24,996.14.

China’s Shanghai Composite declined 14.54 points or 0.41 percent to 3,492.46.