Why Is Inflation Running So Hot in the U.S.?

Inflation in the U.S. is running hotter than at any time in the last 40 years. COVID lockdowns, supply chain disruptions, and Russia’s war on Ukraine have all played a role — but so too has the classic driver of inflation taught in Economics 101:

Too much money chasing too few goods.

As shown in the charts below, both the U.S. Federal Reserve and Congress have injected more money into our economy than our counterparts abroad, which helps explain why America has one of the higher inflation rates among developed economies.

Chart comparing inflation among U.S., Japan, China, EU, and UK