Market Extra: Worries grow that 8% inflation, more Fed comments on balance-sheet runoff could ‘scare the bond market witless again’

Traders are preparing for a U.S. consumer price index report next week that’s likely to show an annual headline rate above 8% for the first time since January 1982 — a development that would raise fresh questions about the Federal Reserve’s early plans for shrinking its balance sheet. Those tentative plans, revealed in the Fed’s March meeting minutes on Wednesday, are to reduce the central bank’s almost $9 trillion portfolio by up to $95 billion each month, following a phase-in period, in order to combat inflation. Investors and traders continue to assess what the likely impact of that process, known as “quantitative…