Elevated Inflation Settles In for the Long Run
The consumer price index is running hot, and the contributors to rising prices will be difficult to cool off.
Inflation could hit 10% if energy prices continue to rise.
Photographer: Stefani Reynolds/AFP/Getty Images
If you thought the 7.9% annual inflation number from February’s consumer price index was scary, you might have to get used to it. Across the U.S. economy, signs are emerging that the surge in prices is far from over. Vladimir Putin’s brutal war in Ukraine has driven the average price of gasoline above $4.50 a gallon; American home values are soaring as if they’re the new tech stocks; and membership fees are climbing for Netflix and Amazon Prime.
Inflation could hit 10% if energy prices continue to rise, according to Bloomberg Economics. Regardless of the specifics, data show the numbers are almost certain to get worse before they get better. More important, there’s a real risk that once embedded, they will stay elevated for a while.