Since 2012, monthly consumer inflation has averaged (on an annualized basis) less than two percent. Prior to this year, the peak was 7.2 percent in August 2012. The last three months have shattered that record. According to the Bureau of Labor Statistics, consumer inflation was 7.7 percent in March, 9.6 percent in April, and 8.0 percent in May.
The last time we experienced three consecutive months of inflation above 7 percent was July 2008 – in the midst of the Great Recession.
The usual cure for inflation is to slow the expansion of the money supply. That comes with the usual side effect of higher interest rates. But higher interest rates are a much bigger problem now than they have been in the past due to the burgeoning federal debt. The federal debt is currently over $28 trillion….