The Globe and Mail reports in its Wednesday edition that a surprisingly hot reading for price increases in August sent stocks tumbling Tuesday amid concerns the U.S. Federal Reserve will continue to raise interest rates. The Globe's David Berman quotes CIBC World Markets economist Katherine Judge saying in a note: "Americans saved on gasoline, but paid more for just about everything else in August. The result was that core inflation was red hot." Following release of the Consumer Price Index (CPI) for August, Ms. Judge said she is not ruling out the possibility the Fed could raise its key interest rate by a full percentage point at its monetary policy meeting next week, and ulimately raise its rate to a high above 4 per cent this year. The reaction of stock markets in the U.S. and Canada suggests renewed investor angst over the possibility of a recession. Still, some observers believe the inflationary threat will subside. Paul Ashworth, chief North America economist at Capital Economics, said the August CPI reading does not line up with evidence of price pressures easing in areas such as rent, health insurance and used vehicles. "We can see disinflation everywhere except in the official CPI statistics," he said.