The politicians, economists, bankers, commentators, and talking heads on TV have all said inflation during this time of COVID would be transitory.

They were all wrong.

Gas prices, food, milk, rent everything is going up and people will need to spend more money to survive.

Some say this is due to supply chain bottlenecks, others fear something far more foreboding – an economic model gone wrong.

Today it was announced by the Bureau of Labor Statistics that inflation in the United States, year-on-year, has hit a 40-year high of 7.5 per cent.

Taking out food and energy prices (core inflation) prices went up by a whopping six per cent between January 2021 and January 2022. Food prices have gone up seven per cent while energy prices have jumped by 27 per cent.

When measured from December to January, inflation was 0.6 per cent. Prices have gone up 0.7 per cent from October to November and 0.9 per cent from September to October. The good news is that wages are rising at their fastest pace in at least 20 years.

“The labour market is hot and inflation is even hotter, which places the Federal Reserve in an awkward position with an interest rate hike over a month away. As the inflation fire burns even hotter, the Federal Reserve will have to bring an even bigger fire hose to put it out,” said Chris Rupkey, chief economist at FwdBonds LLC.

Explaining the Fed’s take on galloping inflation, Loretta Mester, president of the Cleveland Fed, said: “The task before us is to remove the accommodation at the pace necessary to bring inflation under control. As this process continues our monetary policy decisions will need to be data-driven and forward-looking.”

Rampant inflation has hit US President Joe Biden’s approval rating with a poll conducted by Associated Press-NORC Center for Public Affairs Research putting it at just 37 per cent.