War in Europe Exacerbates Inflation, Posing a Challenge for the Fed

The consumer price index has seen annual gains of more than 4% for 10 consecutive months. Early during that period, slightly higher inflation was explained by the disinflationary environment created in March and April of 2020, when almost 22 million workers were laid off, as well as by disruptions in the supply chain and transportation lines caused by the pandemic. The so-called base effects lasted just a few months because inflation persisted and grew.