Inflation surged during the recovery amid pandemic-induced disruptions to supply, while demand for goods was boosted by a shift away from in-person services, and overall demand was supported by monetary and fiscal policy. Russia's invasion of Ukraine in February 2022 was a further supply shock to the global economy, driving up prices for energy and other commodities.
Last June, U.S. inflation hit a peak of 7 percent as measured by the 12-month change in the personal consumption expenditures (PCE) index. In response, the Federal Reserve has been using its monetary policy tools to restore price stability by bringing demand into line with still-constrained supply.