Originally Published: 16 FEB 23 10:59 ET

Updated: 16 FEB 23 11:13 ET

By Paul R. La Monica, CNN

(CNN) -- Inflation doesn't seem to be going away anytime soon. And that's weighing on Wall Street.

Stocks tumbled Thursday morning after the US government's Producer Price Index report showed that prices at the wholesale level rose faster than expected in January. The Dow fell about 250 points, or 0.7%, in mid-morning trading. The S&P 500 was down 0.8% and and the Nasdaq 0.6% lower.

The unwelcome inflation news comes just two days after the Consumer Price Index figures showed that retail prices continue to come in above forecasts.

Strong retail sales numbers Wednesday and another decline in the number of people filing for weekly jobless claims Thursday added to concerns that the economy remains hotter than the Fed would like.

Investors also were unnerved by comments from Cleveland Federal Reserve president Loretta Mester about inflation and the economy.

Mester, who does not currently have a vote on the central bank's interest-rate setting Federal Open Market Committee, said she would have preferred that the Fed had raised rates by a half-point instead of a quarter-point at its last meeting.

"The upside risks to inflation and historical experience suggest to me that the costs of undershooting on policy or prematurely loosening policy still outweigh the costs of overshooting," she said in a speech.

In other words, Mester thinks the Fed would be better off remaining aggressive to ensure that inflation pressures don't pick up again. The Fed can always pause, or even start cutting rates, once inflation is no longer a concern.

"If inflation begins to move down faster than anticipated, we can react appropriately," Mester said.

Traders will be listening closely to comments from two other Fed members that will speak later Thursday.

St. Louis Fed president James Bullard, another regional bank president who does not have a vote on the FOMC this year, is giving a speech this afternoon. Bullard, like Mester, has tended to be more hawkish, meaning he is typically more concerned about inflation and inclined to raise rates.

Fed governor Lisa Cook. who is a FOMC voting member, will also be giving a speech after the market closes.

Investors were also digesting the latest batch of corporate earnings, which were mixed. Shares of Dow component Cisco rallied after the networking equipment giant posted solid results. Streaming media device maker Roku also soared following strong earnings.

But shares of media giant Paramount Global and e-commerce platform Shopify both fell after the two companies underwhelmed investors with their latest earnings and outlooks.