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Opinion
Brian Chappatta

If This Is Peak Inflation, What’s the Path Back to 2%?

November’s consumer price index reached 6.8%, setting up a faster Fed taper but raising questions about how the central bank will return price growth to its preferred trajectory.

Energy costs may be easing, but rent is on the rise.

Energy costs may be easing, but rent is on the rise.

Photographer: Justin Sullivan/Getty Images

After the consumer price index data for October shocked markets, economists, the Biden administration and Federal Reserve officials, there was no chance the Labor Department’s release of November’s CPI on Friday would catch anyone unaware. Its proximity to the central bank’s coming decision only added to the suspense on what was dubbed “the new jobs day.”

The top-line takeaway — that headline U.S. CPI rose at the fastest annual pace since 1982 — was never really in doubt. Instead, the more pressing question was whether inflation would keep up its blistering month-over-month increases, which, in Fed Chair Jerome Powell’s estimation, were supposed to have subsided. Instead, sharply higher prices across the board came roaring back in October, leading him to acknowledge in a conspicuous pivot that “it’s probably a good time to retire” the word “transitory.”