Thread by @DianeSwonk

🔥CPI inflation soars to 7.9% gain from a year ago, hottest pace since January 1982. Energy and food both accelerated and sadly have more room to run, as prices at the pump have hit new records in response to Russia’s invasion of Ukraine.

Gains in food broad based. Only exception was food at workplaces and schools. Some small restaurants are struggling as all of their input costs ⬆️

Ag prices surged in Feb in response to ⬆️energy, feed & fertilizer cost. Loss of grain from Ukraine adds insult to injury.

Those waiting for the pivot from goods into service sector inflation will be disappointed. Prices in both the goods and service sector picked up. Used vehicle prices fell a bit, but still up dramatically from year ago.

Home furnishings and appliances accelerated as backlogs remain long and people are still trying to fill all the homes they bought over the last year.

This is same time service sector prices accelerated with boost in travel and tourism following Omicron wave.

Hotel rooms, air fares & rental cars are surge in cost during the moth.

Rent & home ownership costs picked up at the fastest pace since housing bubble 2006-07. More in pipeline. Could hit peak in rents surge of mid 1980s. Takes ~ year for home values to show in ownership costs

Medical costs were fairly tame with exception of hospital costs. This reflects return of elective surgeries delayed by Omicron and acute labor shortages. Many rural hospitals are facing financial ruin & will fail on the months to come. That will compromise access to health care.

Inflation expectations have also moved up, a key concern for the Fed. There is little choices but to raise rates and commit to more rate hikes. @federalreserve Chair Powell has pledged the Fed is committed to avoiding repeat of 1970s. He promised 1/4 hike in March. More needed