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Interest rates may rise faster now that a key inflation gauge has risen to a 12-month rate of 2%, hitting the Federal Reserve’s target for the first time in a year, MarketWatch staffer Jeffry Bartash reports.

Inflation has been increasing steadily for months owing to the rising cost of oil, higher home prices, the tightest labor market in decades and a strong U.S. and global economy. Prices pressures aren’t likely to ease up much, either.

The Fed’s preferred inflation barometer, the PCE index, rose to 2% year over year from a 1.7% pace in February.

The U.S. economy is growing soundly nearly nine years into an economic expansion, but it was inevitable that such a long period of growth would eventually trigger higher inflation.

Inflation is still quite low by historical standards, but the Fed might be inclined to raise U.S. interest rates more aggressively to make sure it doesn’t get out of hand. If so, Treasury rates are expected to rise and stocks could take a hit. Higher rates tend to draw money out of equities and into bonds.

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