Analysis: the Fed and other central banks have to raise interest rates, but they’d be advised to do it slowly
US inflation at 7% for first time since 1982: live updates
Not since Ronald Reagan was president and Paul Volcker was the hardline chairman of the Federal Reserve has US inflation been as high as 7%, so inevitably the latest jump in the country’s cost of living index will have consequences.
The US central bank has historically tended to fear deep recession more than runaway inflation, scarred as it still is by the legacy of the Great Depression. The Fed, however, cannot ignore the risks of a wage-price spiral developing and will be forced to act.