The Consumer Price Index was released this week, showing inflation at 8.3 percent, year over year. The number is not especially surprising, just a tad better than March. We have probably passed the month of ‘peak’ inflation for this cycle. The reason for this is simply that March’s inflation figures were reported at the beginning of the oil price effects from the Russian invasion of Ukraine and prior to Federal Reserve raising rates. The Federal Reserve is now tightening the money supply, and the large oil price spikes have eased slightly. Still, this leaves open the question of how long unusually high inflation will last, what are its causes and how might it be remedied.

The cause of inflation is an excess supply of money in the economy. The way we measure it includes other forces that temporarily affect prices, and so we are stuck with imperfect measures of the problem. The overall rate of inflation in March was at 8.55 percent, which is as high as it has been since December of 1981. But, if you exclude food and energy prices, which are at least partially attributable to transient effects, inflation is a bit better at 6.4 percent, which is about where it was in 1982. Not much relief there.

Michael Hicks may be reached by email at